How to navigate the PII landscape for a smooth insurance renewal
As firms prepare for the October professional indemnity insurance renewal, Piers Winton, executive director and head of solicitors at Gallagher, reviews the current state of the market, shines a spotlight on the top red flags on insurers’ radars, and outlines practical advice to help firms with a smooth renewal process and secure favourable terms
For the last few years, law firms have enjoyed the perks of a relatively soft professional indemnity insurance (PII) market, and according to Piers Winton, executive director at Gallagher, the good times are likely here to stay for the rest of the year. “The insurance landscape in general is still looking very positive. There’s an abundance of capacity, which translates to lower pricing for law firms, as insurers continue to compete for clients — and there’s real desire to write business.”
Law firm leaders preparing for their insurance renewal this autumn will certainly rejoice at the very likely prospect of lower premiums. However, all good things must come to an end eventually, and Winton notes that for law firms, this may be sooner than later. According to him, these fast and frequent insurance rate drops seen recently are not sustainable long-term, with some experts warning that the market has already reached the same levels seen in 2017, which triggered the Decile 10 initiative a year later — the market-wide crackdown which required all insurers to identify, remediate or exit the worst-performing 10% of their underwriting portfolios to restore profitability.
“Nobody knows for sure what will happen — premiums may end up flattening out next year, the price reductions may slow down, or we may even see costs go up. Regardless, firms should keep a close eye on how the insurance market evolves and make the most of the current favourable conditions.”
Where are the red flags?
Currently, the key drivers of insurance pricing remain unchanged, notes Winton: the firm’s current profitability, the quality of its short- and long-term operational strategy, and what its overall claims history and evolution say about the way the business is managed. Firms that can demonstrate they have a strong management culture, run efficiently and profitably, and maintain strong compliance will likely be well placed to secure good premiums, he explains.
Firms with a diversified range of practice areas are also likely to be seen more favourably in the eyes of an insurer, as this lowers the risk of them being significantly impacted should a particular market face a downturn. “We know that conveyancing is a big part of the private practice legal sector, but you don’t want to be too over-reliant on it, because that puts your firm in a more vulnerable position if the property market suffers or stagnates. However, insurers don’t like dabblers either, so diversifying your business just for the sake of it is not the answer — firms must demonstrate they have the right staff and expertise in place to operate in multiple practice areas,” he explains.
However, there are several areas that are increasingly gaining attention from insurers on the back of recent market developments.
The first is exposure to the UK bridging market. Following the collapse of bridging lender Market Financial Solutions (MFS) in February 2026 amid allegations of fraud and potential double pledging of assets — resulting in an increase of insurance claims — firms operating in this space will likely face increased scrutiny from insurers. “Although a firm is not directly accountable should a bridging loan default, there are technical weaknesses — for example, if the terms of engagement weren’t crystal clear — that a claimant could use to drag the lawyer into a dispute. This is why insurers are now asking more questions of firms involved in such transactions.”
Insurers are also closely monitoring how law firms embed AI both internally and for client service delivery — and notes that the insurers Gallagher works with have already introduced a new AI question set as part of their enhanced underwriting for LawInsure, Gallagher’s exclusive PII product.
What information do insurers want from law firms around AI? Assessment questions include:
-
How does the firm assess the risk of deepfake fraud impacting the practice?
-
Has the firm conducted any specific risk assessments related to deepfake technology?
-
Does the firm have procedures in place to verify the identity of clients and other parties to prevent deepfake impersonation?
-
What steps has the firm taken to prevent deepfake fraud?
-
Does the firm have protocols in place to verify the authenticity of communications and documents?
-
Does the firm provide training to all staff with regard to recognising and responding to deepfake fraud?
-
Has the firm invested in any specific software or tools designed to combat deepfake threats?
-
What data is being entered into the models and how does the firm use proprietary or confidential information in the models?
-
What training does the company provide to it staff on the grounding and framing of AI and what procedures are in place to assess the outputs for accuracy and acceptability?
-
How is the firm billing clients for work involving AI and has it changed from ‘traditional’ advice methods?
-
How is the firm billing clients for work involving AI and has it changed from ‘traditional’ advice methods?
-
Is the use of any tool being disclosed correctly to third parties, where, for example, advice being given has been created in part or wholly with AI?
Winton emphasises that insurers aren’t necessarily worried about AI being used to improve efficiency, particularly in the back-office functions — it may, in fact, be viewed positively if this technology helps firms become more profitable, run more efficiently and reduce the administrative burden off staff to increase their wellbeing and performance. The concerns arise when AI is being used for client-facing work — and when law firms cannot demonstrate they have the right governance frameworks and strategies for supervision, people training and compliance in place to properly manage AI use for such applications. “There are also questions around how AI — which is an expensive investment itself — will impact the business model of a law firm, and thus its profitability. Plus, there is the risk of becoming too reliant on this technology, which is also an area of concern for insurers.”
He adds: “The other concern is the external threats that AI use poses to law firms. The cybersecurity landscape is becoming increasingly complex, and law firms are very vulnerable to attacks by fraudsters using AI for deepfakes to impersonate clients or other members of the team, or to break through its cyber defence and access confidential data.” As such, insurers will pay attention to how well equipped the firm is to deal with such incidents, and what the risks of the firm being impacted by such attacks are — how a firm demonstrates that preparedness will undoubtedly influence their insurance renewal.
Preparation makes the difference
A smooth renewal process starts well before the deadline, emphasises Winton. Yet leaving this to the last minute is a common mistake he still sees some firms doing — one that he advises leaders to rectify.
How the proposal form is completed can also make or break the renewal process, and Winton advises firms to be thorough and transparent from the outset. “Your proposal form is your shop window, so you want that information to be accurate and as comprehensive as possible to ensure the underwriter has the full picture. How you complete this form also tells the insurer a lot about your attitude towards the whole process — and applications that are well thought out and thorough are obviously much better received than rushed or incomplete ones.”
While insurers don’t expect firms to turn their forms into a novel, they should not be afraid to supply as much information as possible to make their case and even include additional notes or a cover letter to explain how they have interpreted specific questions to present the business clearly and transparently.
This is also where open conversations with an insurance broker from the start is key, as they can provide valuable information that can further streamline the renewal process. “You must choose your broker carefully based on their abilities and their market access — as there are products/insurers out there that not every broker can access,” adds Winton.
Naturally, the information firms provide must also be up-to-date and accurate. “One area law firms could improve on is ensuring they’re providing their latest claim prints. Your claims record is your report card, and if that has information from years ago, that will automatically draw alarm bells,” says Winton. “Insurers don’t mind seeing a new notifications on claim prints, that’s to be expected. What’s most important is that those are as up-to-date and accurate as possible, as ultimately this is how you can best showcase your firm, and you don’t lose momentum.”
Regardless of how the market will evolve over the next 12-24 months, Winton emphasises that the firms that will remain attractive to insurers will be those that can confidently show they are well run, diversified and disciplined — and those that don’t treat insurance renewals as an annual admin exercise. In a market that may not stay soft forever, that discipline could be what separates firms that secure favourable cover from those facing tougher terms in future.
