Solicitors feel the pressure

Many small solicitors’ firms will struggle over the next few weeks as the deadline for professional indemnity renewals looms closer.

Insurers have become increasingly wary of this market and are taking steps to avoid future risks. While larger firms will be relatively insulated from this clampdown, firms with four partners or less face choppy waters ahead as insurers hike rates in a bid to lessen their exposure to this market.

Conveyancy practices are set to be hit the hardest as lenders continue to pursue claims on conveyancy transactions.

In 2008, market leader Zurich shed a fifth of its business and has confirmed there will be another significant rise in rates this year. Some smaller firms have already seen rate increases of up to 50%.

Last year, 150 firms ended up in the Assigned Risk Pool and many predict 2009 could see more than double this figure. While new entrants XL Insurance, Allianz and Hannover Re may provide relief to some firms, it is unlikely to be a panacea for entire sector as the upward pressure on rates and premiums looks here to stay.