Joint venture with Miller to offer rated cover to small firms
The Law Society has launched a joint venture with Miller to sell rated professional indemnity insurance directly to small solicitor firms.
Cover for firms with between one and four partners will be sold by Chancery Pii, a joint venture between the society and Miller Insurance Services. It will not accept enquiries from brokers, pay any broker commissions or charge management fees. It will also not offer a broker or advisory service.
The Law Society said the absence of broker commission and management fees would create a “viable level of profitability for insurers”.
Chancery Pii polices are underwritten by a panel of insurers with at least A- or equivalent financial security rating, who will each take a share of the liability and premium. They are Allianz Global Corporate & Specialty and Lloyd’s syndicates Aspen and Pembroke.
The Law Society said it was increasingly concerned that the level of commission paid to some brokers did not give solicitors value for money. “The advice given by some brokers is of variable quality, with some brokers using a disclaimer to avoid liability when placing solicitor firms with unrated insurers,” it added.
Law Society chief executive Desmond Hudson said: “We have had concerns about instability of the solicitors’ PII market, particularly the one-to-four-partner segment, for some time now. Many firms have resorted to using an unrated insurer – often because of lack of obvious choice. A number of rated insurers have withdrawn from this segment and the gap has been filled by unrated insurers, some of whom enter for a few years before withdrawing or, worse, becoming insolvent. This is extremely detrimental to the profession.
“It was right for us to explore options with the insurance market to increase the availability of choice for our members, particularly smaller firms. Chancery Pii is the result of this. We have created a solution that provides a quick and easy way to access rated insurers, that emphasises security, quality and stability. We continue to advise firms to consider the financial security of insurers in the market.”
But United Insurance Brokers director Simon Lovat said the launch posed a conflict of interest for the Law Society. “There’s a real question as to whether the Law Society does provide independent advice to members about professional indemnity insurance, or whether it now only looks to promote advice for its own financial gain.”
Chancery Pii is a trading name of Six Clerks Insurance Services Limited, an appointed representative of Miller Insurance Services LLP. Six Clerks Insurance Services Limited is a joint venture between Miller and the Law Society.
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