Professional indemnity insurance (PII) renewals are always a nervous time for law firms. With premiums remaining one of the top three overheads for most practices, getting the best possible terms is important. We sat down with Gary Horswell from specialist PII broker, Ntegrity, to hear what he’s seeing in the market, and to gather some practical tips for those firms heading into renewal over the coming months.
Gary, how would you describe the state of the PII market right now?
It’s surprisingly competitive. Several new insurers have entered the market recently, which has had the effect of driving down premiums for the right kind of risk. Incumbent underwriters are responding by sharpening their pencils to hold onto market share.
That said, claims against law firms remain stubbornly high – both in frequency and cost. Defence costs in particular have risen. So while headline premiums have been stable or even falling, it’s not sustainable forever. Firms shouldn’t assume this benign phase will last indefinitely.
We’ve heard about some turbulence with certain underwriters. What’s been happening?
Yes, there have been signs of stress. One insurer unexpectedly exited a high-profile scheme mid-agreement, which was unsettling for the firms involved. There are also rumours of heavy losses in the “top-up” layers above the SRA minimum cover.
For most firms this won’t cause immediate problems, but it underlines that insurers are still feeling the strain – and why it’s worth shopping around and not relying on a single facility.
Are there particular types of firms finding it harder to place cover?
Definitely. Claims-driven businesses – think consumer claims such as car finance mis-selling – are under much closer scrutiny. Insurers worry about the sustainability of models that rely on a short-term regulatory or market opportunity.
New start-ups also find the going tough, even when led by high-calibre ex-City lawyers. The challenge is convincing insurers that the business has staying power. Regulators are also taking an interest in whether some models really deliver long-term value.
What are insurers looking for in terms of income or financial stability?
We’re seeing a strong push for minimum income thresholds. Increasingly, insurers expect start-ups to show £250k turnover in year one, or at least a credible plan to get there quickly.
The reason is simple: underwriters must factor in the cost of run-off cover if the firm fails. They want reassurance that the firm will generate the funds to pay that run-off premium and any claim excesses.
For those unable to hit these figures, an alternative model – freelance solicitor, consultancy platform, or unregulated business – may be a stepping stone until the practice is established.
What can firms with a difficult claims or regulatory history do to improve their chances?
Transparency is key. Insurers like to see evidence that lessons have been learned. Independent risk reviews can really help here, as they provide insurers with a credible narrative about what went wrong and what’s been put in place to prevent a recurrence.
We’ve worked with firms alongside regulatory specialists to develop action plans, and that has persuaded underwriters to stay on board. A supplementary note with your proposal form can make a big difference – highlighting risk awareness, compliance culture, and improvements.
What practical tips do you have for firms approaching renewal this year?
- Don’t rely on the form alone. Proposal forms don’t always capture the professionalism of your firm. A short narrative explaining your risk management, compliance oversight, and claims history adds real value.
- Avoid pitfalls. Incomplete forms, vague answers, or downplaying problems tend to backfire.
- Think like an underwriter. They want to see evidence of financial stability, good governance, and a proactive approach to risk.
What about additional covers like D&O or cyber insurance?
Directors’ & Officers’ (D&O) policies are well worth considering. They can protect COLPs, COFAs, and managers against regulatory investigations, employment liabilities, and other management-related exposures. Remember that PII only covers regulatory defence costs when there’s also a professional negligence claim – so standalone D&O often fills an important gap.
Cyber insurance is increasingly essential. The SRA has reported that three-quarters of firms have been targeted by cyber criminals. Attacks on IT providers (as with the CTS outage that paralysed conveyancers) and ransomware incidents at Magic Circle firms show no one is immune.
Cyber insurance covers not just ransom payments but also incident response, forensic costs, legal advice, business interruption, and even funds transfer fraud. It’s no longer a “nice to have” – it’s core protection alongside PII.
What can firms do if they’re not happy with their broker or renewal terms?
Get a second opinion. Many firms have stuck with the same insurer and broker for years, but that loyalty can mean missed opportunities.
At Ntegrity, we offer a free review service. If you’re already on the best terms, we’ll say so. But in the right cases we’ve secured substantial savings – sometimes with improved cover.
Finally, what do you see as the biggest concerns for insurers right now?
The main concerns we’re hearing from underwriters fall into three broad areas.
First is property-related risk and the Building Safety Act. This has created new liabilities for professionals involved in development, conveyancing and related work. Insurers are monitoring closely how claims may emerge from these changes.
Second is cyber resilience. With three-quarters of law firms having already been targeted by cyber criminals, insurers are rightly nervous about how well firms can defend themselves and recover from an attack. They increasingly expect to see firms taking cyber seriously – not just relying on IT providers, but demonstrating their own governance and response plans. PI Insurers are also looking to see an increase in the uptake of cyber insurance to be able to access a wide range of experts when needed, given that according to the Law Society only 28% of firms have cover.
Finally, there’s the use (and potential abuse) of AI. Tools that promise efficiency also carry risks if they lead to errors in advice, breaches of confidentiality, or over-reliance on unchecked outputs. It’s still early days, but insurers are alive to the risks and want to see firms using AI responsibly and with appropriate safeguards.
Conclusion
So to summarise, while the PII market feels relatively benign right now, firms shouldn’t be lulled into a false sense of security. Underwriters are paying closer attention to business models, financial stability and risk management than ever before. A good renewal isn’t just about ticking the boxes on a proposal form – it’s about telling your firm’s story in a way that reassures insurers. And with the rise in cyber threats and regulatory pressure on compliance officers, firms need to think beyond PII alone. Getting the right blend of cover – and the right broker in your corner – can make all the difference when the unexpected happens.
- Contact Gary Horswell for a free insurance review.
- Join our COLP Insider mailing list for an invitation to a free PII update webinar on 1st October 2025.
