Industry News

Law Society issues guidance on PII

14 October 2016

The Law Society’s updated Practice Note: Professional Indemnity Insurance includes new sections on aggregation and insurance brokers, together with an updated 2016/17 PII Outlook. 

Aggregation is the ability of insurers to class a number of related claims as one claim.  These may include claims arising from one or a series of acts or omissions; from the same or a similar act or omission in a series of related matters or transactions and all claims in the same matter or transaction.  Practices could be liable for the uninsured loss if any one claim (i.e. including any aggregated claims) exceeds the limit of indemnity, potentially resulting in a shortfall in cover.  Top-up or excess layer insurance cover should therefore be considered.  

The Practice Note also draws attention to the fact that some insurance brokers have a tied agreement with a single insurer, rather than access to a number of participating insurers (see the SRA website for a full list of all participating insurers, who are regulated by the FCA and have entered into an agreement with the SRA).  It is good practice to make enquiries to determine whether the broker is able to access insurers ‘that are prepared to offer appropriate cover to your firm type and size’.  Preferably sooner rather than later, as some insurers limit the amount of business they will accept, turning away business once this level is reached.  Late proposals also tend to attract higher premiums. 

The Law Society expects the 2016/2017 PII Outlook to be similar to last year and reminds practices of the value of being able to demonstrate effective risk management systems (specifically, CQS and Lexcel) to insurers, when arranging PII.  Although October was traditionally the PII renewal date, firms are no longer tied to this and it is possible to obtain multi-year policies of varying duration. 

Action: check your renewal date and put in place calendar alerts/reminders so that you are able to gather all requisite information, address any issues (e.g. change in status of your practice) and submit your PII application approximately 10 weeks before your renewal date.  

Ian Braithwaite
Client Relationship Manager

T: 0845 056 3949
M: 0743 727 4046

For General Enquiries: Email
24 hour Helpline 0845 0563949
or alternatively fill in the contact form below and we will contact you within 24 hours
LBS Legal lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

Latest News

Sign up for our newsletter
and join our mailing list.

Lexcel logo
Our endorsements lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.