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Navigating the changing landscape of professional indemnity insurance for law firms

By Babbar Abbas and Adam Marks | August 30, 2023

An update from WTW’s perspective with a look at market conditions, trends in the legal sector, insurer competition and renewals.
Financial, Executive and Professional Risks (FINEX)|Cyber Risk Management

The insurance industry plays a pivotal role in the global economy, providing essential coverage for personal and business risks. At WTW, we are dedicated to procuring robust and tailored risk management solutions for our clients' Professional Indemnity Insurance (PII) needs.

This update analyses our observations of the current London market conditions for professional indemnity insurance (PII) and the impact this has on law firms. This update is based on our observations of the market for our WTW clients and is not a whole market review.

The shift in market conditions

Previous professional indemnity insurance market updates highlighted challenging hard market conditions driven by insurers' price corrections due to significant losses, compounded by the pandemic's impact. Remote working raised concerns about supervision and workplace culture, leading insurers to drastically curtail their risk appetite. However, the PII market is now showing signs of improvement, with positive developments observed in the legal sector.

Promising trends for the legal sector

Following the conclusion of the 1st of April 2023 renewal season, we are delighted to report comparatively softer market conditions for law firms seeking PII coverage. The landscape has become more favourable, resulting in improved terms for our clients. As we approach the 1st of October 2023 renewal period, preliminary indications suggest that the rate growth trajectory is slowing down, and, in some cases, even retracting. These developments are promising for prospective PII seekers in the legal sector.

Growing insurer competition

Insurers are pursuing ambitious growth targets, leading to increased competition among qualifying insurers for certain profiles of firms. This competitive environment has been advantageous for our clients, as we have successfully leveraged competitive tension among insurers to negotiate rate reductions during the April renewal season. A similar strategy is being deployed for the October renewals, delivering welcome news to our clients.

Augmented measures for favourable renewal terms

To ensure favourable renewal terms, we recommend an augmented approach to include specific measures such as:

  • Robust risk management practices
    Emphasise robust client onboarding, due diligence, financial sanctions regime, and risk assessments. Firms must confirm their position regarding direct or indirect exposure to sanctioned individuals and entities.
  • Cybersecurity imperative
    A robust cybersecurity solution is now considered a fully-fledged boardroom agenda item. Insurers view it as a critical tool for risk mitigation and ensuring a strong cybersecurity posture increases the likelihood of obtaining favourable cyber insurance placement quotes. While the cyber insurance market has become more favourable, insurers require a baseline level of cyber security hygiene.
  • Addressing PII-cyber policy overlaps
    It is crucial to ensure a clear understanding of the overlap or potential gap in coverage between PII and cyber policies. The IUA (International Underwriting Association) cyber exclusion for PII and varying cyber-related claims arising from professional services underscore the importance of clarity in coverage.
  • Business continuity and operational resilience
    A strong risk culture helps retain staff and valuable clients while attracting new talent and business opportunities. Firms should be prepared for unexpected challenges, particularly as we navigate potential financial downturns. Addressing staff attrition levels becomes crucial for some insurers, necessitating sound talent retention strategies.
  • Comprehensive financial narratives
    Insurers are increasingly interested in understanding the financial resilience of firms, particularly considering the current economic climate. Providing a more comprehensive narrative on balance sheets, work in progress, and year-end figures becomes essential for demonstrating financial stability.
  • Fostering strong insurer relationships
    Cultivating strong relationships with insurers remains vital. Pre-renewal meetings provide an opportunity to articulate and expand on areas that may not have been of major concern to insurers in the past. Emphasize the firm's ESG (Environmental, Social, and Governance) program, encompassing environmental sustainability, inclusion and diversity, employee well-being and supervision, holistic firm culture, and a no-blame culture.
  • Maximising possibilities through comprehensive marketing
    As market conditions continue to improve, undertaking a full marketing exercise becomes crucial in securing the best possible results. Besides gaining market access, partnering with a broker who comprehensively understands the firm's profile, recognizes areas for risk mitigation, and effectively communicates risk management efforts to insurers becomes vital.


Our teams will continue to monitor and analyse the global insurance market, providing valuable insights into the ever-changing landscape of PII. As the market gradually shifts towards more favourable conditions, our clients in the legal sector can expect improved terms during the upcoming renewal season. To ensure the best possible outcomes, we recommend implementing augmented measures, fostering strong relationships with insurers, and undertaking comprehensive marketing exercises. With a robust risk management strategy and strategic broker partnership, firms can navigate the evolving PII market with confidence.


Senior Associate - PI FINEX Legal Services
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Associate Director, FINEX Cyber & TMT
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Head of Legal Services - PI FINEX

Associate Director - PI FINEX Legal Services

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