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Mutual insurers have many advantages over commercial insurers. The benefits include:
- Control over the scope of cover allowing for more generous terms of cover
- Emphasis on high standards of service
- Long term commitment to providing insurance to Members
- Transparent underwriting
- Insurance at cost
Ultimate control of a mutual insurance company rests with its Members, who are also its customers. This control is exercised through the Directors, who are elected by the Members. The fact that the Directors come from the same profession as the Members ensures that:
- the Board will be aware of the changing insurance needs of Members
- the collective interests of Members are paramount when taking decisions about the scope of the insurance cover to be provided
- the Members have the insurance cover they need, rather than the insurance cover commercial insurers choose to impose upon them
As mutual insurers are owned and controlled by their Members, they understand absolutely the service requirements of their Members. The Board of Directors ensures that the Managers provide the very best services to Members. This is particularly important in the area of claims handling, where mutual insurers invest heavily compared to commercial insurers.
Mutual insurance companies are established for a specific purpose. In the case of Bar Mutual, this was to provide self-employed barristers with the certainty of being able to purchase professional indemnity insurance at a time when commercial insurers were either unwilling to offer insurance or only willing to do so at exorbitant premiums. Because commercial insurers are motivated by profit, they regularly stop insuring particular classes of business if they think they can make more profit by moving into other classes of business. Mutual insurers are not driven solely by the need to make a profit and are therefore committed to the long-term provision of a particular class of insurance to their Members.
Bar Mutual provides cover for:
- Civil liabilities arising from its members' practices
- Defending disciplinary complaints made to, or raised by, the Bar Standards Board
- Claims by solicitors for their fees under approved CFAs
The cover extends to claims and disciplinary proceedings brought in any jurisdiction, provided the provisions of the Terms of Cover are met.