The Law Society says firms are continuing to find it difficult to renew PII policies, and that a greater number are reporting premium increases.

The Law Society’s Professional Indemnity Insurance Survey: Renewals 2010 suggets that 63.5% reported no renewal difficulties in 2010, compared to 79% in 2009, while 69.3% experienced a premium increase in 2010, compared to 62% in 2009.

The report also revealed that there was no evidence of discrimination by insurers to black and minority ethnic law firms in the renewal process. Law Society chief executive Desmond Hudson has today written to the Financial Services Authority (FSA), the Association of British Insurers (ABI) and the Equality and Human Rights Commission reiterating the need to maintain the drive for a more open and transparent renewals process.

Law Society chief executive Desmond Hudson says: “It is encouraging to see that the survey findings shows only 4.4% of BME firms felt that their ethnicity had an impact on the premium they paid and that the size of a firm, its claims history and in-year changes to the number of fee earners have the biggest effect the firms’ PII premium.

“The Law Society, EHRC and others including the SRA have worked together to attempt to ensure that any potential for any form of discrimination is removed. The ABI and the FSA have also undertaken some work in this area. However, collectively, we must continue to work ensure insurers continue to move towards a PII process that is transparent and that risk factors are properly understood by firms.

“We have requested to be informed of the ongoing progress in this respect so that any differences in treatment between groups of our members can be seen to have legitimate objective justification.”

A like for like comparison in the survey of BME and non-BME small firms found no significant differences in outcomes or premiums paid, suggesting that any difficulty in the renewal process experienced by BME firms were likely to be related to the size of those firms rather than the ethnicity of the firm.

However, there was a disproportionate number of BME firms in the Assigned Risk Pool according to the survey’s findings. The small number of ARP firms in the sample means this is not a statistically a reliable analysis to explain this finding.

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