Professional Indemnity Insurance premiums part of the vicious circle affecting
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A tale of two cities? It must sometimes seem so to Irelandís smaller law firms. Whilst for the few, very large, international firms, professional indemnity insurance is easily arranged and, one assumes, the premiums easily absorbed into their overheads, the picture is very different for sole practitioners and the family firms.
As reported on irishtimes.com, the collapse of the property market, on which so many smaller firms traditionally relied, has revealed a number of instances of questionable behaviour. And although these may only involve a small number of firms, the result has been a dramatic rise in claims and an even more dramatic increase in professional indemnity insurance premiums. Even for those with an entirely blameless record.
And, as if falling fee income in a stalling economy combined with rising costs werenít enough, for many small firm partners even retirement isnít an option. Why? Because they canít afford the professional indemnity run-off premiums they would need to maintain. (Although it should be said that in this respect, help may be on its way in the form of a run-off pool which is due to be created in the next few months.)
It certainly seems as though the belt-tightening that many of Irelandís smaller firms have had to endure isnít set to end any time soon.