Solicitors looking to renew their Professional Indemnity (PI) insurance cover ahead of the October 1st deadline could be facing "very inexpensive" premiums, according to Frank Maher.

The Legal Risk partner suggests that market capacity is sufficient to allow all practitioners to renew their PI cover in time for the deadline, without seeing their premiums rise from the soft market conditions seen in recent years.

"There haven't been any major payouts - which has helped - and there have been sufficient players in the market to support it," he comments.

"Most firms are working under the notion that it's fairly cheap and it may go up in the future."

Mr Maher adds that premiums this year could prove even cheaper than in 2006 due to the widespread capacity and lack of major claims.

However, he predicts that conditions could harden in the next two to three years if any shocks to the market are sustained

Also the potential for conditions to harden in the future could be enhanced if a "major player" were to withdraw from the PI market, he observes.

Marc Riches, assistant director of solicitors' specialist broker PYV Legal, commented: "Whilst there is some evidence to back up some of what Mr Maher says to date, the prediction for the remainder of the current season and certainly for the next year is not quite so clear cut."

He continued: "There has for example already been a withdrawal by Hiscox who underwrote a sizeable amount of the solicitors community, who have walked away from the table stating that rates are unsustainable at this level."

Mr Riches added: "We ourselves have been pleased to secure rate reductions for a lot of our clients, however we are also aware of increases in some premiums and withdrawal of cover where there is adverse claims experience, so in that sense, the market is already hardening." He further stated: "Indeed every insurer I speak to suggests that they feel the same and that any further reduction in rates is not something that they would be prepared to support."

In closing, he said: "The next few weeks until the renewal deadline will be very interesting and I would urge practices not to wait until the very last minute in the hope that they might secure the cheapest deal, as this is not the way to get the best out of an already overstressed and close to breaking-point situation."

PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.