Small law firms will be hardest hit by rising professional indemnity (PI) premiums, following the doubling of the minimum level of solicitor's PI cover, brokers have warned.
The Law Society's indemnity insurance committee has raised the minimum level from £1m to £2m. The limit had remained at £1m since September 1989.
The committee has also agreed to change the rules on the aggregation of claims, meaning insurers will have a single exposure on mass litigation actions, rather than an exposure for each claim brought as part of a class action.
Alexander Forbes Professions director Steven Holland said this meant claims were likely to be bigger, prompting the need for a higher minimum PI level.
"Sole practitioners are going to be the hardest hit as they tend to buy the minimum level of cover."
But he said the soft market would encourage insurers to soften the blow for the law firms.
Zurich Professional sales and operations director, Jeremy Alwyn said: "While we assess each risk on an individual basis, clearly the cost of providing £2m of cover is greater than £1m, therefore premiums will rise accordingly."
The increase is subject to approval from the Master of the Rolls. It is due for implementation in October this year.
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