Solicitors given option to spread rising cost of Professional Indemnity cover

With the majority of the UK’s law firms about to receive bills for Professional Indemnity Insurance (PII) and with widely anticipated rises in premium charges, Premium Credit is once again offering solicitors a finance facility, obtainable through a credit broker, to spread the cost of cover over convenient monthly repayments rather than having to pay in one lump sum.

Solicitors PII accounts for an estimated £280M GWP a year, and the specialist lender expects increased demand for its finance facility to pay for cover as law firms look to preserve cash flow against a backdrop of a hardening insurance market and the economic uncertainty created by Brexit and Covid-19. With headlines such as ‘Bleak picture of massive PII premiums set to remain for now’ reported during the summer, this next wave of premium billing and the likely hikes in cost, will impact law firms to varying degrees.

Paying the cost of premiums via an instalment facility, allows law firms to spend precious cash reserves in other business critical areas with repayments typically spread over 10, 12 or 18 months funding PII costs from £10k upwards.

Roger Brown, Premium Credit’s Chief Commercial Officer for Specialist Lending said: “As prices rise for law firms of all sizes, we are pleased to be able to offer a new line of credit to cover their Professional Indemnity Insurance. PII is a significant outgoing for many firms, in some cases exceeding other essential business payments such as facilities or rent. Our finance solution can be tailored to meet the demands of their business.”

Effective use of finance is a popular option with many businesses using credit to help meet everyday expenses such as insurance cover and preserving cash flow. Recent research from Premium Credit shows SME cash balances are being squeezed significantly – around one in three firms (33%) say cash reserves have fallen during the pandemic, while 7% say their firm has no cash reserves. Just 13% say they have seen a rise in cash reserves.

Mr Brown continues: “Our payment solutions, that supported many businesses last year, are designed to give solicitors and law firms a greater control over cash-flow, allowing their cash reserves to work more effectively and to better meet their current business needs. It also helps them to accommodate the increased cost of PII likely to be experienced by many this year too.

Working with Premium Credit is a strong option for law firms looking for wider payment options. It’s a simple digital application process. With years of significant investment in technology we ensure the whole customer journey is a smooth, seamless process – we as the lender undertake the bulk of the administration.”

Premium Credit advises that it’s important to act in a timely way so firms have the opportunity to independently research and acquire the necessary PII cover in an affordable manner, either independently, or through a specialist credit broker.

Authored by Premium Credit

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