Presentation and Representation are key to a successful PII renewal

Guest Writer, Joel Harding from Howden Group, Insurance Brokers

Professional Indemnity insurance (PII) is critical to the very existence of a law firm and a significant expense. Focusing on your “presentation” and equally, your chosen “representation” will help your firm achieve the optimum result at renewal.

My team and I know how hard the Institute of Legal Finance & Management (ILFM) work to offer its members the best insights and latest information on industry matters including professional indemnity insurance.

Two of my top tips would be to focus on the research and time put into the actual presentation of the renewal form, and due diligence in striving to find the best representative for your company.

Presentation for PII Forms – invest in a quality timeframe

Insurers are actively looking for the best quality law firms and at renewal time, firms should focus on demonstrating the quality of their risk profile.  To achieve this, law firms need to grab insurers’ attention with a strong renewal presentation. 

Proposal forms require a great deal of information and take time to complete. Never rush a renewal form.

Investing time and attention in their completion is essential and I would like to highlight the following key points to support this:

• Ensure the form is legible and complete, using the electronic format if possible.
• Include any supplementary information in a style that can be easily assimilated, with a clear reference to the numbering of the associated question on the proposal form.
• Check that the numbers add up. Underwriters don’t mind if you round off your income split between activities to whole numbers or calculate it to three decimal places – as long as it adds up to 100%.
• If your firm does not record information in a way that corresponds with questions that are asked, then talk with your broker about providing the information that you do record. Provided it addresses the issue that the insurer is interested in, then this should not be a problem.
• Take care with Yes/No questions. The answer the insurer is looking for is usually obvious. If it clearly requires a “yes” answer and you are unable to give that, try and give an explanation that will still satisfy the insurer. You should put a note on the form to refer the insurer to your supplementary pages where your explanation can be found.
• Up-to-date claims records from previous insurers should be attached to the form, including those for any prior practices. The number of years you need to go back varies from one insurer to another, although six years is a good starting point.
• If your claims record shows significant claim payments or reserves, offer an explanation within your supplementary information. A few lines on the circumstances, your thoughts on liability in respect of open matters and any other points where you feel that the hard facts on the claims print do not truly reflect actuality can help.
• Tell underwriters if you have been able to learn from claims, close loopholes, tighten procedures, introduce new systems or in any other way alleviate the chance of recurrence. Underwriters will look for this if your claims record is less than stellar.
• Be your own best advocate. Firms often complain that the proposal form doesn’t give a complete picture of their business or allow them to demonstrate why their firm is a better risk than others. That is a fair comment, and we encourage firms to include a letter or a separate note setting out information about the firm that doesn’t emerge from the answers on the proposal form. Be concise – two to three pages is enough.
• Ensure you comply with your duty of fair presentation under the Insurance Act. Double-check your proposal form carefully and ensure that you have disclosed all material information including any claims or circumstances that you have not yet notified.

Some of the above guidance might seem very straightforward, but even small things can make a difference and it is surprising how often some of these issues are missed. Regardless of market conditions, optimising your renewal presentation goes a long way to securing a successful renewal.

Representation of PII Forms – do your research

When it comes to PII it is important for law firms to be represented by experts who not only have a proven track record of working with the legal sector, but who also have access to, and influence with, insurers.

Research well, do your due diligence, and find a broker that is right for you, one you trust to navigate your firm throughout the process; and one that gives you the personal attention you and your firm deserve.

Do your research and do not hesitate to ask questions.

It might seem obvious but please make sure you select a broker who has experience working with law firms. Your broker will be representing you and your business so it is imperative you have confidence that they will present you strongly to insurers. A good broker will steer your firm through the challenges of the PII renewal process. But a great broker won’t stop there. They will provide support and assistance in the unfortunate event that you have a claim and continue to keep you updated on important factors and regulatory changes affecting the market throughout the year to ensure you are well informed during, after and right on until your next renewal.

Questions to ask your PII Broker

Some of the questions you should ask a prospective broker are as follows:

• Are you a specialist PII broker?
• Which insurers can you access?
• Can you access insurers directly or do you have to use other brokers to access some or all of them?
• Do you have any special or exclusive arrangements with any particular insurers?
• Do you have an up-to-date Solicitors Proposal Form and Business Resilience (COVID-19) Questionnaire that will be accepted by a number of markets?
• How quickly can you submit my application and get an answer?
• Do you have access to a finance facility to fund the premium?
• Do you have a claims team to provide assistance if a claim is made against us?
• What other support and assistance do you provide during the year?

The Law Society has published further guidance on choosing a broker and information about the role of a broker and we recommend this to all firms reviewing their broker arrangements.

I hope you find this guidance useful but if you would like to find out more, visit Howden or please feel free to contact me directly at joel.harding@howdengroup.com .