So, we are pleased to be launching our guide for new law firms (which naturally tend to be Sole Practitioners) to help navigate the SRA authorisation process and provides in-depth advice for achieving a competitive PII quote.

What makes a good PII application?

When making an application for a PII quotation, there are four elements to your presentation that underwriters will expect to see before deciding whether to quote and at what level. These are:

1. The proposal form

This traditionally was the area that brokers displayed their ambivalence for the new law firm by insisting they used an ordinary proposal form which asked many irrelevant questions about what a firm had done in the past and failed to recognise that this was all about predicting the future. At Miller we have designed a proposal form that will extract the key information about how much you expect to earn and from what work areas, whilst also focusing on the key elements of risk management and just how the firm will be run.

2. Your business plan

You will need to write a good, relevant and believable business plan. In our new guide you will find a useful template on how to produce this. It has been produced by an insurer so will give you an insight into what they want to see included. Underwriters prefer a niche firm, to a firm that is looking to work in too many areas of the law and they are looking to be convinced that your business is sustainable and will survive the tricky opening period. The business plan should fit with all the information you have given on the proposal form and the cash flow forecast.

3. Cash flow forecast

The reason that underwriters want a cash flow forecast (you will find an example of this in our new guide) is so that they can see there is enough financial backing to make sure your business can survive and then thrive. You should remember that if a business fails, underwriters have to cover the firm in run-off for six years even if they do not get paid a premium and pay any excesses even if these are not paid. So it is not surprising that they take a greater interest in the financial viability of a legal firm than ever before.

4. A comprehensive CV

If we are honest underwriters are not interested that you captained the hockey team or were the opening bat for Old Dreamers CC but they are interested in all your relevant legal and business experience. They will generally be looking for at least three years PQE and any time you have been involved in the commercial aspects of an enterprise as well as all your learning and law based knowledge and experience.

So there you have it, the four key elements to successfully getting your first PII quote. Remember you are applying for cover for negligent acts and errors or omissions – so it’s definitely worth taking care and making sure there aren’t any in your application!