Solicitors’ professional indemnity insurance market is fragmenting, finds Marsh


The solicitors’ professional indemnity insurance market is becoming increasingly fragmented for many small and mid-sized law firms in England and Wales, according to Marsh.

As 1 October approaches—the most common professional indemnity insurance renewal date for the sector—some insurers are applying greater rigour and are being increasingly selective, or are repricing risks, in a bid to limit their exposure.

Reductions are mainly limited to those small and mid-sized law firms with very few or no incurred claims, or lower risk areas of work. Firms that have claims relating to cyber breaches or identity fraud are more likely to experience premium increases.

Marsh reported that while the primary insurance market for solicitors’ professional indemnity risks is well-capitalised and competitive, there is some upward movement in pricing in the excess insurance market, which provides cover for small and mid-sized law firms above compulsory levels.

Michael Morgan, professional liability placement leader for the UK at Marsh, said: “Wider market uncertainty is prompting many insurers to review their books of business, adjust their capacity, or withdraw from sectors that they perceive as high risk or no longer profitable. Those small and mid-sized law firms in England and Wales that are perceived as ‘high risk’ by insurers are bearing the brunt of any premium increases in the primary insurance market this year.”

John Kunzler, senior risk adviser in the law firm practice at Marsh, added: “In order to secure professional indemnity insurance at reasonable terms, small and mid-sized law firms should begin their renewals in good time and demonstrate that they have robust risk management processes in place.”

Last month, Marsh launched a new insurance solution to assist small and mid-sized law firms in England and Wales in managing their professional indemnity risks.

Available exclusively through Marsh, the solution uses analytics and independent performance data to model a law firm’s individual risk profile, meaning clients will receive tailored pricing based on their risk management performance and claims histories.

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Mark Dugdale is the editor of Claims Media. Mark welcomes articles, letters or feedback from readers and can be reached via