Professional Indemnity Insurance (PII) is fundamental to the success and stability of every law firm. Howden – specialist insurers for the legal profession – has examined the outcome of the October 2021 solicitors’ PII renewal and provides insight into what your law firm can expect from the market in 2022.
Howden’s bi-annual Market Report for Solicitors provides an opportunity to reflect on what is happening in the professional indemnity insurance (PII) market and discuss issues that are relevant to the legal profession. There is a great deal happening at the present time, including a change to the Minimum Terms and Conditions (MTCs) to address the issue of silent cyber, a consultation on post 6-year run-off cover (PSYROC), and the SRA’s thematic review on firm culture and wellbeing.
As far as the PII market is concerned, the story has been largely the same for more than two years. Howden continues to experience the hardest market in over 20 years. While this is challenging, it believes that most firms are weathering the storm.
There is no doubt that additional work generated by the Stamp Duty Land Tax (SDLT) holiday has created much-needed cash reserves for those practices engaged in conveyancing work, which involves around 60% of all SRA-regulated firms. For some, this will have enabled the doors to stay open and we note that SRA statistics record 567 law firms have closed in the 12-month period from October 2020 to September 2021. This is down on the figure of 607 for the previous 12-month period 2.
Notwithstanding this, Howden acknowledges that many firms are facing challenges, particularly given the uncertainty of the economic outlook in a post-pandemic and post-Brexit world.
In the latest edition of the Market Report, Howden:
- reviews the 1 October 2021 renewal and forecast ahead to 2022
- provides an update on PII claims
- highlights issues that firms should focus attention on in advance of their next renewal
- discusses how the MTCs respond to claims where foreign advice has been given, or proceedings are issued against a firm outside England and Wales
- provides a ‘Back to Basics’ article on PII cover that it invites firms to share with junior lawyers
- offer advice regarding potential wellbeing initiatives firms can consider
- update the position on silent cyber and PSYROC.
Download the report
Howden’s 2022 Market Report is available here.