Financing your professional indemnity insurance could be easier than you think

Despite spiralling premiums, Mike Stevenson at Iceberg explains ways to make financing your firm’s professional indemnity insurance easier and cheaper.

The vast majority of legal firms renew their professional indemnity insurance (PII) in October. With this now less than a month away, it’s time for legal managers to take action – if they haven’t already – and consider their financing options.

It’s no secret that PII is getting more expensive. There are many factors at play in driving those costs, and – as a result – more firms will be looking at financing solutions in order to manage this effectively.

Although finding the right policy at the right price might require more work than it did before the pandemic, choosing and applying for the most suitable financing option need not be a headache.

Our most important piece of advice for managers when looking for insurance is to put the time in.

The PII market remains highly competitive and there is a lot of choice out there. It’s important not to give in to inertia and to shop around for the right deal. It’s also key to put the time required into your application and to collate detailed information that demonstrates the professionalism, credibility and stability of your firm.

Once you’ve found the right quote, it’s time to consider funding.

Financing your PII

At a time when many firms are prioritising building cash reserves, being able to pay your PII in monthly instalments will make all the difference.

Vendor financing options look like an easy solution at first glance, although these plans are usually a lot more expensive than other options available in the market, with much more rigid payment terms.

Looking at external options comes with a host of benefits. Spending a little time comparing independent providers will lead to not only money being saved, but could also yield more flexible payment terms. A little extra research will go a long way in ensuring you secure funding that’s straightforward and tailored to your needs.

In order to make the process as easy as possible for legal businesses, some PII funders, including Iceberg, have introduced more streamlined credit processes.

This allows some firms to successfully apply for funding if they meet criteria without having to include as much information as they had to previously or provide personal guarantees. On top of this, some providers are also reducing the amount of turnover required by a legal business in order to be eligible for PII funding, which means smaller firms have a broader range of options.

Even though the PII market is tough at the moment, securing funding shouldn’t have to be. Firms must ensure that they evaluate their options thoroughly and pick the right provider – one that’s customer-centric and places emphasis on clarity, flexibility and ease of application.