Banks suing solicitors lover mortgage fraud puts firms at risk
Small high street solicitors face 20% professional Indemnity (PI) premium rises with the British Insurance Brokers Association (BIBA) saying some may not find cover, the Times reports.
The Law Society’ back-up assigned risk pool for those unable to buy cover from insurers charges 27.5% of turnover. One firm was charged £200,000 for its annual cover, up from £80,000 two years ago.
Chris Milnes, of the professional services practice at broker Heath Lambert, said: “There have been some horror stories in the market. Last year saw some of the larger [insurance providers] shed practices they saw as higher risk by quoting over five times above the average market rates. We expect to see this trend continue this year.”
Small firms at risk
RSA no longer insures law firms with fewer than three partners.
Small firms could be wiped out by a single negligence claim. Conveyancing are considered high risk as insurers expect banks to sue solicitors over mortgage fraud.
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