Could Using the Right Regulatory Technology Improve Your PII Costs?
Professional Indemnity Insurance (PII) is a crucial safeguard for legal professionals, protecting them against claims of negligence or errors in their services. For conveyancers, PII is essential as it covers legal costs and any damages awarded, ensuring their financial stability in the face of potential lawsuits. Most firms will carry out regular reviews of their requirements and look at ways of keeping costs down.
For a number of years, The Law Society has published the following overview on its website, offering a guide to law firms seeking PII:
If your firm works in what’s seen by insurers as a high-risk area of law – such as conveyancing or commercial – and/or has a claims history, you should show that:
- your firm has good business practices
- you’ve addressed the issues that resulted in previous claims
- Make sure your website is up to date with the areas of law your firm works in and the services offered. Brokers often check websites as part of their research into a firm.
As well as your firm’s claims history and areas of law, the broker will also consider:
- the number of partners in your firm – some brokers specialise in firms with fewer than four partners
- fee income – you should explain any significant changes since your last quote
- risk management – you should be able to show this is part of your firm’s culture
Advances in regulated technology are revolutionising the conveyancing and professional services sectors by streamlining processes, enhancing accuracy, and reducing risks. These innovations are particularly impactful in the areas of onboarding and workflow management, which in turn influence the dynamics of PII and can demonstrate how risk management is part of your firm’s culture.
The Role of Technology in Client Onboarding
Technology has significantly simplified and expedited the process for onboarding new clients. Automated systems handle tasks such as document verification, background checks and source of funds checks as well as carrying out ongoing monitoring, which has traditionally required substantial manual effort.
Anti Money Laundering (AML) and Know Your Client (KYC) checks can now be incorporated into existing case or document management systems, saving expensive software development costs and time and avoiding the need for extensive colleague re-training.
The beneficial result of using technology to carry out these laborious tasks is the removal of human error and a significant reduction in the risk of financial or identity fraud. It also means that large volumes of checks can be completed quickly, which is important when firms are being asked to re-verify existing clients annually and to be able to demonstrate an audit of the exercise.
The use of reliable and suitably accredited technology is imperative for protecting data security, and therefore vital for maintaining the integrity of conveyancing operations. Advanced encryption methods and secure cloud storage protect sensitive client information, reducing the risk of data breaches and potential claims.
What does this mean for PII?
A reduction in risk and error means a lower likelihood of claims due to streamlined and accurate onboarding processes which in turn not only avoids expensive insurance excess costs but offers a potential for lower PII premiums. Insurers may recognise that lawyers and conveyancers who utilise advanced onboarding technologies demonstrate a decreased risk profile. HM Land Registry has been at the forefront of this approach by introducing its Safe Harbour Standards which effectively indemnify conveyancing firms against transactions that are subsequently found to be fraudulent – so long as they have applied Qualified Electronic Signatures to documents and deeds. Qualified Electronic Signatures require NFC technology (to read the chip in a passport) in conjunction with biometric facial recognition and other layers of digital security during the signing process so that the signatory can be identified with accuracy.
Conclusion
Regulatory technology significantly enhances onboarding and workflows for conveyancers and professional services by reducing errors, ensuring compliance, and improving data security. These improvements could lead to a lower risk of PII claims and potential reductions in insurance premiums.
The integration of advanced technologies into conveyancing practices is not just a trend but a necessity for future-proofing the profession. As these technologies evolve, they will continue to shape the landscape of PII, offering greater protection and efficiency for conveyancers.
Find Out More
If you would like to find out more about using digital methods for your firm’s document exchange, ID verification and AML and KYC checks to help reduce risk whilst satisfying regulatory requirements and potentially improve your PII costs, speak to one of the experts at VirtualSignature-ID.
