As renewal season for Solicitors’ Professional Indemnity Insurance fast approaches, Purbeck Personal Guarantee Insurance has launched a new Professional Risks Personal Guarantee Insurance (PGI) policy specifically for the Partners/Directors of Solicitors’ firms. Brokers supporting the specialist Solicitors Professional Indemnity market can now offer this new solution to Clients to reduce the risk to their personal assets should their firm fail.
The annual insurance policy provides insurance cover for the Directors of solicitors firms that have provided Personal Guarantees to insurance companies in respect of Professional Indemnity Insurance (PII) run-off premiums. The run-off premium is typically 300% of the latest annual PII premium.
There has been a recent move in the market for insurance companies offering Solicitors’ Professional Indemnity Insurance to request Personal Guarantees as a condition of cover. This is to provide the insurer with means of recovery in respect of the run-off premium in the scenario where the solicitors firm fails, enters an insolvency procedure and the insurer is obligated to provide 6-year run-off cover. The cover applies where the run-off premium cannot be met by available cash resources of the firm.
Todd Davison, Managing Director of Purbeck Personal Guarantee Insurance said: “During the past year we have seen increasing interest from Solicitors firms for PGI specifically for Professional Indemnity cover. This is largely in response to the Minimum Terms and Conditions (MTC) for participating PII insurers to provide 6 year’s run-off PII cover, whether or not the run-off premiums are funded by the solicitors firm. The MTC are set by the Solicitors Regulatory Authority and despite approaches from the insurance sector in 2020 for a relaxation of the rules, now appear to be an enduring requirement in the Solicitors PII marketplace.
“As a Personal Guarantee looks set to become a standard requirement of Solicitors’ Professional Indemnity Insurance, we have developed a specific Professional Risks PGI to help protect the personal assets of the Directors of Solicitors firms, leveraging our unique skills and expertise as the UK’s sole Personal Guarantee Insurance provider.”