Firms wishing to merge are facing potential Professional Indemnity (PI) insurance problems by providing their insurer with short notice of the development, it has been claimed.

Risk management firm Legal Risk suggests that early activity in the run-up to the October 1st renewal date for solicitors' PI cover has indicated a tendency to prioritise issues other than insurance during mergers.

However, the firm's Frank Maher warns that the question of PI insurance should be answered at the earliest opportunity if problems are to be avoided.

"We are still finding that firms instruct us days - or in one case hours - before merging, with problems which are more difficult to unravel at short notice," he states.

"Insurance aspects of mergers should always be near the top of the agenda, not left till last; they are not a formality."

Following the successful PYV Risk Management Seminar for solicitors practices recently held in London, PYV Assistant Director Marc Riches confirmed that mergers were a popular subject during the conference with a number of delegates considering this course of action, and said that "Professional Indemnity insurance should be a prime concern and wherever possible your broker should be involved in the loop as soon as possible in order to help achieve a satisfactory outcome".

He further commented that "all too often notifications of change are left too late to ensure that the correct insurance is in place in time for the new arrangements".