What professional Indemnity Insurance Offers
Solicitors and lawyers in the UK must carry professional indemnity insurance to protect them and their clients against costly legal mistakes and omissions. Solicitors can choose from three basic types of insurance cover for their practices.
- One type of cover protects against a negative act or omission.
- The second kind of indemnity insurance pays for damages that occur due to a negligent act.
- The third form includes more intangible damages, such as defamation, breach of contract, and civil offences.
Basic Cover
Primary cover requires a minimum of £2,000,000 protection for any legal practice and the figures rises to £3,000,000 for incorporated practices or LLPs. These figures might prove way too low for lawyers who routinely deal with major corporate clients. The first cover level generally costs the most. Solicitors can contract for additional protection at more affordable ates.
Choosing the Right Level of Cover
Numerous factors impact the decision about how much cover to choose. Different insurers offer different rates and insurance packages, and lawyers should investigate the options before making a commitment. Most solicitors understand the need to cover their practice very well – it comes with the territory.
- The practice's claim history should be considered.
- The number of principals and support employees also make a substantial difference in cover levels.
- The type of law a firm practices influences how much protection a law firm would require.
- The legal-fee structure also makes a difference. Storefront lawyers that deal with economically depressed clients might need less protection than lawyers who represent wealthy clients.
- The excess lawyers choose significantly affects how expensive insurance premiums will be.
Benefit of a Broker
Busy solicitors often lack the time to investigate multiple insurance options and entrust their needs to office managers or business brokers. Office managers can research many insurance options efficiently online to get rate quotes, cover options, and policy details so the principal partners can make an informed decision quickly.
Business brokers often put together bespoke policies that closely match the needs of individual solicitors. The cover levels, excesses, and other options can vary greatly between family solicitors working in rural areas and high-pressure solicitors working for sensitive manufacturers with global-marketing operations, which could potentially involve billions of pounds.
Benefits of insurance brokers include the following advantages for busy practices.
- Professional brokers can put together a bespoke package, utilising several different providers if necessary.
- Brokers assist in obtaining essential documentation.
- A broker can remind its clients when renewals are due and ensure that policies continue without interruption.
- Brokers can monitor the status of pending claims against a firm and assist in pursuing legal claims on behalf of the law practice.
- Professional insurance experts will research the financial particulars of various insurers, as well as their level of customer service.
- Risk management also represents an important consideration for law practices. Reducing risks can cut premiums and reduce potential claims against the firm.
Other Types of Insurance
Insurance cover for buildings and employer's indemnity insurance are also essential. Loss of income due to accidents or injuries might also prove beneficial. Solicitors who represent insolvency cases run the risk of losing their fees in these cases, but insurance cover can offer fee protection in these cases.
