Law firms are facing steep price rises for their professional indemnity insurance with rates for some types of cover more than doubling, just as many of them suffer declining profitability in the fallout from Covid-19.
On October 1 when law firms renewed insurance cover to protect them against professional negligence claims, around three-quarters of them found that prices for even the most basic level of insurance had risen by around 20 per cent on average.
The increase heaps pressure on firms at a time when the pandemic has eaten into profits and revenues. They have instigated temporary pay cuts in order to conserve cash as a Citywide decline in dealmaking has taken its toll on their clients.
A rising volume of claims against conveyancers who work on contentious property developments is largely to blame, as well as lawyers working on increasingly complex probate and family matters. There has also been