Licensed Conveyancers - is your firm renewal-ready?

1.

Notification of claims and circumstances

It is always important to ensure you have notified all claims and circumstances prior to renewal – and particularly if there is to be a change of insurer, as will happen this year. You need to make sure you do a thorough “spring-clean” and notify all matters as soon as possible.

In our experience some firms can leave this exercise too late and only ask their fee earners to complete a declaration regarding the existence (or otherwise) of claims and circumstances just prior to submitting their proposal form. A surge in notifications just prior to renewal can be unhelpful – particularly where they continue to trickle in after renewal terms have been given.

Start work on this now and remind your teams about the importance of notifying circumstances as well as claims. By way of reminder:

A claim is “a demand for, or an assertion of a right to, compensation or damages or an intimation of an intention to seek compensation or damages in respect of any civil liability whatsoever.”

A circumstance is “information or facts or matters of which the Insured is aware which the Insured believes may give rise to a Claim against the Insured for which the Insured could become legally liable.”

If you are ever unsure as to whether a matter should be notified, always pick up the phone to the Howden claims team and they can talk this through with you. But as a general rule of thumb – if in doubt, notify.

2.

Review existing notifications

It’s helpful if your claims summary is as “tidy” as possible when renewing your PII. Precautionary notifications that are ultimately closed without payment on a firm’s claims record will be viewed positively by insurers. It is therefore useful to review any open, precautionary matters and consider if it would be an appropriate point to ask insurers to close them.

Those matters that are actual claims should also be reviewed. Consideration could be given to removing reserves and closing a matter if there has been a lengthy period of inactivity. Alternatively, consider whether the existing level of the reserve noted by your insurer needs to be challenged, and a lower reserve proposed. The removal or reduction of reserves could have a positive impact on renewal terms.

Also consider whether there are any lessons to learn from matters that have been notified during the year. Insurers are always interested to know whether a notification has driven any changes from a risk management perspective, to ensure that errors or omissions are not repeated. We encourage firms to think carefully about this. Do not be too quick to dismiss matters as a “one off”, as in our experience very few actually are.

3.

Risk review

Insurers want to know that firms are actively managing risk. It is important to engage in a regular review of policies and procedures to identify areas where problems have arisen, or improvement is needed. This should be an ongoing process.

Reviewing the questions on the latest PII proposal form is a good starting point, as it indicates the issues that insurers are concerned about. Many of the questions you will find on the proposal form are in response to claims activity that insurers have experienced. If you are not able to answer the questions in a way that is likely to reassure underwriters, then take the opportunity to make changes that will improve your position.

4. 

Review your website

This is something that firms don’t always consider in the context of their PII renewal. While the PII proposal form does not ask questions about your website, it is important to be aware that underwriters might look at it as part of their due diligence. It can be an indicator of your firm’s attention to detail and a useful check on the areas of work that you disclose.

If your website contains a blog or articles for your clients, then make sure these are current and that good quality content is regularly added. If the last entry was several months ago and you have resource issues updating and posting new material, then it might be better to remove this part of the website altogether.

Also pay attention to the “legal notices” section of your website and ensure this is updated as and when needed. This is an issue that can often be overlooked.

5.

Review arrangements for completion of proposal documentation

The PII proposal form usually takes more time to complete than firms anticipate. The individual charged with the task will often be reliant on a number of others to provide the relevant information. If that’s you, then we recommend you establish a timeline and warn those who need to provide you with information. Don’t let their procrastination become your emergency!