PII renewal season is approaching, with around two-thirds of law firms expected to renew their insurance in the next six weeks. Following years of limited market appetite, there is now an opportune moment to capitalise on the increasingly favourable market conditions.
It’s not too late to benefit, but you will need to approach your PII renewal strategically to ensure your firm is well-presented to insurers.
1. Don’t Just Go Through The Motions
It’s easy to fall into the trap of simply filling in your renewal form and submitting it. We’re all busy, after all. However, insurers scrutinise the detail, so this approach can be costly. Take the time to step back, review your form, and assess whether it truly reflects your firm’s strengths and risk profile. If not, you could find yourself facing unnecessarily high premiums.
We have seen firms put forward a ‘presentation pack’ to insurers, so that they really get a feel for how the firm ticks.
2. Demonstrate a Clear Understanding of Risk and Mitigation
Insurers want to see that you not only understand the risks associated with your work but also have robust strategies in place to mitigate them. Your renewal application should clearly outline these strategies. If the standard form doesn’t allow you to fully convey this, consider preparing an additional document that details your risk management approach. This can be a powerful tool, showing that your firm is proactive and well-prepared.
Consider an external compliance and risk audit.
3. Highlight Your Compliance Management
With regulatory obligations becoming ever more complex, it’s crucial that your renewal application demonstrates how effectively your firm manages its compliance duties. Insurers will be looking for evidence of strong systems in place to handle areas such as anti-money laundering, data protection, cyber-security and client care. A thorough, well-documented compliance framework can reassure insurers that your firm is diligent and disciplined.
4. Demonstrate Sound Financial Health
Financial stability is more important than ever. Insurers are wary of firms that show signs of financial distress. Your renewal application should therefore include clear evidence of your firm’s financial health, such as stable cash flow, profitability, and prudent debt management. Demonstrating sound financials can help to mitigate premium increases or even negotiate a better rate.
5. Engage with Your Broker Early and Often
Your PII policy is one of your firm’s largest overheads, making it critical to get it right. A good broker will take the time to discuss your renewal presentation with you before it goes to insurers. If your broker isn’t offering this service, it might be time to find one who does. In a market where every detail counts, you need a broker who sees your firm as more than just a policy number and is committed to presenting it in the best possible light.
6. Plan Ahead for Financing
Premium financing is becoming more complex, with finance companies conducting deeper inquiries into law firms’ financial situations. Start planning now to ensure you have the necessary documentation and financial data in place. Early preparation can prevent last-minute hitches and ensure that your financing goes smoothly.
Finance brokers specialising in law firms are relatively rare, but we can make some recommendations..
7. Challenge Premium Increases
Given the current market conditions, premium increases are unlikely (all things being equal) and you shouldn’t accept them without question. If you receive a higher quote, engage with your broker and insurers to understand the reasons behind the increase. Is it purely market-driven, or is it a reflection of how your firm is being perceived? By digging deeper, you may find areas where you can negotiate a reduction.
On several occasions we have seen insurers misunderstanding the legal service being offered.
What next?
The PII renewal process has never been more critical, especially given the encouraging market conditions. By taking a proactive, strategic approach, you can ensure your firm is seen as a low-risk, well-managed operation, which is key to securing the best possible terms.
If you haven’t yet reviewed your renewal strategy, now is the time. Don’t leave it until the last minute—start the conversation with your broker today. And if you’re not getting the support you need, consider whether it’s time for a change.
