Essential Insurance For Solicitors

The most common types of insurance for self employed or small business solicitors in the UK are Professional Indemnity and Public Liability. Although Public Liability is not mandatory, it is generally a part of a solicitor's insurance package, as it offers cover if he deals directly with the public and cover for his business should it be the cause of death or injury to a third party or damage to a third party's property. It also usually covers compensation awarded and any legal fees that are attached to a claim. The minimum amount of Public Liability cover is 2 million, but many solicitors will opt for more.

Employers' Liability Insurance

If a solicitor has one or more employees, Employers' Liability Insurance is required by law and protects him against most claims for illness or injury put forth by an employee. The Employers' Liability Act of 1998 obligates employers to maintain a minimum cover of 5 million to handle this type of claim. In most cases, a solicitor with one or more employees will be encouraged by their insurance broker to assume at least 10 million in cover.

Employers receive a certificate of Employers' Liability Insurance, which must be displaced in an area where it can be reviewed by employees and health and safety inspectors. The certificate will verify the insurance company's name, policy number, name of employer, amount of cover, date policy commenced and the date it expires. If you do not have a policy, penalties can run as high as 2,500 per day for every day without cover.

There can be certain exemptions to the Employers' Liability Insurance mandate in the UK that include the owner of the company is the only employee and has 50% of the shares of the company, or the employees are close family relatives. These exemptions should be clarified with your insurance broker.

Professional Indemnity Insurance

One of the more complex insurances that a solicitor must have is Professional Indemnity. It is mandatory in the UK, with a minimum level set by the Law Society. The Solicitors' Regulatory Authority states that the cover has to be underwritten by an insurer that is approved and abides by the conditions and minimum terms as set forth by the Law Society. The minimum cover set for self-employed or partnership solicitors is 2 million. If a partnership is operated as limited liability (LLP) or any other recognised body, the level of cover is 3 million. Factors including demands of clients for whom a solicitor serves, types of customers solicitor serves and the kind of work a solicitor undertakes all contribute to the amount of cover recommended by an approved solicitor's insurance broker. Solicitors are encouraged to speak an approved insurance broker to determine the amount of cover or to discuss renewal. It is extremely important to review cover annually as any changes to your practice, to your client base or to the type of solicitor's work you engage in will probably affect indemnity limits required or recommended.

The cost of cover for a Professional Indemnity policy will depend on factors including claims history, fee income, type of solicitor services, number of employees and risk management regime. Another contributing factor is the amount you (the solicitor) will pay out-of-pocket should a claim occur. Rates for solicitor Professional Indemnity Insurance vary depending on the market, the insurance broker and the type of solicitor's practice. Different rates will often apply for different solicitor specializations including personal injury, conveyancing, employment law (for employer or employee), commercial litigation, will and probate, criminal, family, medical negligence and more.

Whether operating as a self-employed solicitor or with a staff, solicitors offer professional advice and must be careful about the advice they give. If a solicitor gives the wrong advice for any number of reasons and a client suffers a financial loss, he may file a claim against a solicitor in order to seek compensation. Professional Indemnity Insurance will likely protect the solicitor from breach and negligence, misstatements or misrepresentations, intellectual property rights infringement or wilful dishonesty on the part of employees, self-employed freelancers, partner or partners or directors. The policy will likely help cover the solicitor defence, damages of dissatisfied client and legal fees incurred.

Because of the complexities of Professional Indemnity Insurance and the various levels of cover for solicitors in the UK, in order to secure the best terms at reasonable rates, it is strongly advised to consult a qualified Professional Indemnity Insurance broker to discuss the best strategy to take given the solicitor's trade you are practicing.

Other Insurances For Solicitors

Office Insurance will help cover equipment should any external factors like theft or damage occur.

Some insurers offer protection cover against earnings lost because of business interruption like storm or flood damage.

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