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Create the perfect Professional Indemnity Application

A number of perennial cookery shows on the telly continue to capture the nation’s imagination as amateur chefs and bakers struggle through gruelling rounds of increasingly intense competition. The contestants strive for perfection under the spotlight of the TV studio and to my mind, there is a similarity with the Professional Indemnity season. Time ticks by, the pressure rises before the timer pings on 30th September and we all worry.

Not exactly a crowd pleaser but the PI renewal ‘game’ remains pretty much the same, what can the contestants do to make sure they don’t end up with ‘soggy bottoms’?

As a solicitor buying insurance, there are two parts to the process for the perfect PII proposal; an understanding of brokers/insurers and a well prepared proposal.

Insurers – come in two flavours, plain (unrated) and self-raising (rated). Each has its own part of the market, plain is usually looking for up to 10 partner firms whilst rated insurers often have limited appetite for sub 10 partners.

Brokers – again they come in many flavours, including producing brokers who find the firms, placing brokers who find the insurers and general brokers who do both.

So how do they all mix?

Bigger law firms usually have a relationship with a large broking firm. They agree a fee and the broker will supply all their insurance needs, these are usually long term and established relationships. The bigger (rated) insurers tend to prefer these relationships.

For the rest of us it’s a little more complicated because in recent years there has been a scarcity of affordable rated insurers looking at less than 10 partner firms, and the unrated market has risen in importance. We need to be able to separate the good from the rest, be guided by the chef de cuisine as buying the cheapest ingredients doesn’t always make for a happy mix.

Unrated insurers carry reinsurance (basically insurers insuring insurers) and looking at the reinsurers, some are rated, providing comfort as to security and comfort.

Back to the recipe, ingredients are next, no broker has access to the whole market, some insurers will only deal with brokers, sometimes only one broker, solicitors cannot access these markets directly. The core ingredient for a good PII season is the application form, a complete form will give the underwriter a quick way to see if they want to sample the menu, they will then produce the set of requirements (ingredients) they need to take the matter further.

Fortunately we have a good idea as to these ingredients:

It sounds old fashion but simple things such as an easy to read application pack help the underwriter to quickly assess a proposal.

With all renewals on the same day (it will take time to spread throughout the year) underwriters need to distil the deluge of applications down to the ones they want to offer terms on, the easier we make it for them the better the chances of a competitive quote.

So the motto is clear, ‘Start early and prepare well to get a reasonable quote’.