melonfool wrote:Surely insurance doesn't cover incompetence? They won't be insured for long if it does and they keep doing it.
It depends how you define incompetence. You could argue that making a serious mistake that resulted in substantial financial loss is incompetence. However, it's exactly this sort of incompetence that is covered by professional indemnity insurance.
On the other hand you could take the view that as everyone makes mistakes a serious error is not of itself a sign of incompetence. Even the best practitioners make mistakes, some of which have very serious consequences.
And although making repeated mistakes would be an indication of incompetence the practitioner would still be covered by their PI insurance, though they may well find it difficult or impossible to renew their cover.
I expect also that the solicitor will be well covered by indemnity insurance so not likely to be touched financially.
As set out above, a practitioner that makes a series of errors that result in claims may well be unable to renew his PI cover, and as a result will have to close his business, which is a pretty serious financial penalty.
Even if cover can be obtained the premium will be increased to reflect the claims record, and may well be set at a level that's unsustainable.
Finally, most PI policies have a fairly hefty excess - perhaps as much as £5,000 or £10,000 - so a negligence claim can be a very expensive exercise for a solicitor (or any other professional for that matter).