It doesn't add up

I received a letter from my professional indemnity insurance broker. This is always something of a heart-stopping moment. Are they going to be looking for some ridiculously large premium which conjures up visions of countless further proposal forms that will have to be completed to get competitive quotes from others, or will we have to engage in that Persian carpet type haggle which will eventually lead to a slashing of the premium?

This, however, was a nice letter. It started off by congratulating me on my accreditation to the Law Society conveyancing scheme. It said as a result my premium will be radically reduced. The letter went on to note that I have had no claims or notification of claims in the previous year and that will also be taken into account, and it recognised that as I am now applying for LEXCEL this will also impact on my premium which should be at least 50 per cent less than last year. Finally, the letter suggested that as I have the cutest black Labrador in town they might even decide to let me have insurance for nothing – and it was at that point that I awoke from my daydreaming and realised that no such thing or letter had arrived!

Sadly I am still awaiting a premium from my broker. I have filled in the form and dealt with the couple of requisitions asked of me by my broker but still no premium. In the old days I used to sort this type of business out normally in the first week of July. Last year I had to wait until the first week of September which was cutting if fairly fine.

I suspect most of the brokers and insurers realise that they can cut the best deal if they rack up the pressure and do not suggest premiums until the last minute. There is something cruel and unusual about this process. Everything has value and why a firm of solicitors like mine simply cannot be given a premium relatively promptly after the completion of the proposal form I cannot understand. If a client came to me and asked for the price of a certain piece of litigation I would be in a position to give him that price there and then or within a day. If I said to the client hang on I should be able to give you a competitive price within the next two months I expect I would get a very short, sharp reply.

Certainly the insurers have the information at their fingertips now. The proposal form gets longer and longer every year. This year’s was the longest yet. Oh for the good old days when we filled in two or three pages when the Law Society was in charge of the scheme. Now the process is long, detailed and involves not just filling in the form but also putting in supplemental documents reminding me of bidding for a local authority contract or indeed applying for the Conveyancing Quality Mark.

No recognition

It is interesting that when filling in the forms this year I had thought there may have been a bit more song and dance about whether you were a member of the Conveyancing Quality Scheme. In fact on the form I completed there was one small question and nothing more. I suspect that may change in the future. Certainly if you are applying for indemnity insurance and you are a conveyancing practitioner surely there will be questions about whether you have joined the scheme, intend to do so, or perhaps more pertinently have you been refused? As I understand there is a cohort of firms that have applied for the conveyancing accreditation mark and have been declined. What are their prospects for getting indemnity insurance?

I suppose the most frustrating part of the indemnity insurance renewal process is the fact that little recognition appears to be given to a good claims record. Last year I had no claims and no notification of claims. I believe that counts for something and I also believe that over the last 53 years that my firm has been in practice we have had very few claims. In fact, when you work out what we have paid in indemnity premiums over that period and what our insurers have paid out for the few miserable little claims that have been made they have certainly done extraordinarily well out of their business with Oliver Fisher Solicitors. There really should be a no-claims bonus for solicitors. There appears not to be and indeed there seems to be scant recognition of those firms like mine that rarely, if ever, make a claim. Is there really a difference between car insurance and professional indemnity insurance?

Looking at the figures it seems that the overall guiding factor when it comes to fixing a premium is the firm’s turnover. That is simply unfair and there should be some change in how indemnity insurance premiums are calculated.

Having a cute black Labrador should count for something but most of all running a professional office with few claims must be a more significant factor.