In reality, most lawyers rely on brokers to help them, and most insurers only sell policies through a broker. A specialized PII broker will be able to leverage this knowledge and experience to your advantage by presenting your business to show insurers that your business is a “good” risk. Most insurers ask you to pay the full premium before confirming coverage. You should carefully consider the access to insurers that any potential broker has. We accept that some financial statements are necessarily time-limited and that some insurers choose to set acceptance deadlines of less than 21 days to ensure that the value of active offers does not exceed their previous income threshold. The SRA requires participating insurers to sign an agreement to provide personal data to lawyers, but does not review, authorize or regulate it. Section 37 of the Solicitors Act 1974 allows the SRA to adopt compensation rules that require lawyers or a certain group of lawyers to purchase and maintain insurance with “registered insurers.” While some brokers are in direct contact with several different suppliers, so they are best placed to handle all types of businesses and all sizes, some have a commercial agreement with a single insurer known as a “linked agreement” (exclusivity). Many insurers work on a “first-come, first served” basis, and there is a risk that a scattergun approach to proposal forms, without proper verification of the information provided, will lead to a de-click and reduce your chances of insurance. Sub-brokers may enter into related agreements with insurers to a larger or more specialized “sub-broke” PII broker. Some brokers have entered into a related commercial agreement with a single insurer for certain segments of the profession. This may mean that the broker can make transactions with a single insurer. In the past, we have been concerned about the number of lawyers who rely on undated insurers. At the time of the 2012/2013 extension, 16% of companies used unskilled insurers to cover IPs.
It is never wise to flood the market with proposal forms. However, as noted above, you may need to send a form to different insurers/brokers to access the entire market available to your business. It is important that you understand in advance which insurers a broker can apply on your behalf and if they have related agreements. The Solicitors Regulation Authority does not regulate, control or authorize any insurer. To be considered a participating insurer, an insurer must be a “registered insurer” within the meaning of Section 87 (1A) of the Solicitors Act 1974.