Insurers will earn an extra £55m from solicitors this year as a hardening market forces up total premiums by 25 per cent to £221m.
Figures released by Zurich Professional, obtained from the Law Society Assigned Risks Pool (ARP), show that the 9,500 law firms in the country will pay £221m to the 27 insurers in the solicitors' indemnity market.
The same number of firms paid these 27 insurers £166m in premiums between them last year.
It is not yet known how many firms have ended up in the ARP, which is the home for law firms that have been deemed too high a risk to be insured on the open market.
The ARP asks professional indemnity (PI) insurers to estimate their premium income every year so as to share out the risk of firms in the pool accordingly.Zurich has the largest open market share this year, 30 per cent up from last year's 18 per cent , so it will be asked by the ARP to take on the largest group of high-risk firms.
Zurich was in second place last year, behind The St Paul. The St Paul is now in second place, expecting to write £45m of premiums for solicitors, compared with Zurich's £47m.
According to Reynolds Porter Chamberlain chairman Tim Brown, the 33 per cent total rise could be a deceptively low figure.
“I would predict that the Assigned Risks Pool has a larger number of firms in it this year, so the comparisons aren't like with like,” he said.
“The eventual increase will be even greater for individual firms, as there are less of us in the market.”
Some firms are expected to see the price of cover increase by as much as 400 per cent this year, according to a report carried out by broker Alexander Forbes.