3 tips about Professional Indemnity Insurance that you can’t afford to miss
In the last quarter of 2021, the average cost of PII premiums rose by around 30%. There are no imminent signs of this exponential rise in Professional Indemnity cover slowing any time soon.
Claims against firms are rising, thanks at least in part to a thriving sub industry of ‘claims farms’ firms pushing clients to examine their previous property purchases for evidence of overpaid Stamp Duty, PPI style.
With cost spiralling throughout the industry and the SRA considering raising the maximum for fines it can issue, it’s an expensive time to be a law firm. But how (if at all) can the climb of PII fees be arrested?
1.Work Smarter, not harder
You could spend a lot of time and effort expanding the boundaries of your firm’s competencies in order to guard against as many errors as possible, or you could choose an easier path.
Collaboration with other firms specialising in areas you don’t is one answer – recognising areas where your firm might lack the totality of expertise needed to minimise errors and sourcing advice appropriately.
No tax partners? Consider engaging the services of a professional tax adviser to assist with tax-based elements to your caseload.
By obtaining this sort of outside help you not only reduce the odds of errors being made, but you also outsource the risk if they are – if you’ve consulted an expert on a particular topic, it’s their advice on the line, not yours, if things do go amiss.
2.Invest in the smaller details
It’s easy to look at the big picture of your firm’s performance and draw conclusions, but larger trends are nearly always informed by smaller influences. Your conveyancing department might be overrun with work and service levels may be suffering as a consequence, leading to client dissatisfaction and complaints.
More complaints means more scope for risk and inevitably leads to higher PII costs.
Why is your department struggling? It’s unlikely you need more fee earners, and many may have taken on additional administrative help during the ‘boom season’ created by the Chancellor’s Covid-induced SDLT ‘holiday’.
But why not consider more such help on a permanent basis? In a gig economy, with many people looking for flexible working arrangements, maybe you can take on an extra body or two when required to manage workload?
Perhaps elements of your firm’s internal system can be simplified to accommodate this?
Once you start looking at the smaller details, solutions may often present themselves quicker than you might expect.
3.Let Compass Show you the Way
The majority of complaints against law firms in the last eighteen months have related to SDLT overpayments, largely based on missed claims for Multiple Dwellings Relief although evidence suggests that this may simply be the tip of the Iceberg.
Your CQS obligations now include a detailed audit trail for each conveyancing case demonstrating how the SDLT figure was reached.
Your firm’s reputation depends on you getting these matters right. HMRC’s own calculator is poor, unintuitive and misses many of the nuances that can lead to just the sort of claims that can drive up your PII.
Compass Stamp Duty Calculator, by contrast, is built from the ground up to take account of every possible variable in a complex and ever-evolving legislative landscape, and provide an answer accordingly.
It will provide you with the audit trail you need, integrate seamlessly into your CMS and processes, and carries the benefit of its own PII cover. In fact, you could say that it provides the best elements of the above two solutions in one simple package.
Contact us today to find out more, and make a positive start to keeping your PII costs in check.
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