BRISTOL, 7 June 2006 – West of England law firms need to step up their management of day to day business risks in the run up to their professional indemnity (PI) insurance renewals, as insurers are starting to offer preferential long term packages to the best managed solicitors.

Speaking today at a joint seminar with the Bristol Law Society, Mike Perry of Aon’s Professional Risks unit, a leading PI insurance broker, is advising local firms that underwriters of the compulsory insurance will offer less favourable terms to solicitors who are not effectively managing the risks to their business and have a poor claims record.

Typical negligence claims are caused by:

• solicitors overlooking a second mortgage, or;
• failing to deal promptly with the execution of a will.

At the same time, negligence claims are becoming more expensive due to higher property prices and, in turn, the increasing value of clients’ estates.

As a result, insurers are acting more cautiously and are looking to retain and attract firms who show a commitment to controlling their risks and reducing the possibility of claims. The need for good practice management to plan for long term stability has become increasingly important as the Law Society is proposing to revise practice rule 5 which would require the firm to make arrangements for the effective management of the practice. 

Tools to help solicitors with their practice management include a free self assessment Quality Assurance analysis, available exclusively through Aon to 1-10 partner firms, whereby solicitors can compare their approach against the Lexcel standard and learn where to improve.

Mike Perry, director of Aon’s Professional Risks unit which works with over 2000 law firms in England & Wales, is telling delegates: “As a law firm, you need to sell yourself to insurers as you would to a client.  Insurers want to take on well managed risks where the firm actively seeks to reduce the possibility of a professional indemnity claim.”

Mr Perry’s colleague Ryan Senior, associate director of Aon’s Professional Risks unit in Bristol, added: “Since solicitors’ PI came into the open market in 2000, the biggest change is insurers’ increased focus on the quality of a firm. Insurers have always been able review a firm’s claims experience but now, by using self assessment tools, solicitors may prevent the losses occurring in the first place. Law firms need to be aware that this trend is here to stay and that risk management must go to the top of the agenda.”

About Aon

Aon Corporation  is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 46,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

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