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There a number of very important factors to consider before committing to the renewal of your firm’s professional indemnity insurance (PII). One of the most important considerations is the actual choice of insurer providing the cover for the firm’s compulsory level of insurance.

Lemma, the failed Gibraltar-based solicitors’ indemnity insurer, has left run-off claims worth around £25m to be borne by the financial services industry in the wake of its collapse last year, it has emerged.

The Solicitors Regulation Authority has finally given ground over unrated insurers and is to investigate again whether it should introduce financial eligibility criteria. The regulator has launched an assessment of the “full implications” of such a move.

A single scheme joining up professional indemnity insurance and compensation funds across the whole legal services market – including unregulated providers – should be actively explored, the Legal Services Consumer Panel has recommended.

Two-thirds of law firms saw their professional indemnity insurance premiums go down last year, with switching insurers the most common way of securing it, Law Society figures have revealed. The society has also warned that under-pressure small firms are risking their future by going with unrated providers.