The benefits of a mutual
Mutuals have many advantages over commercial insurers. The benefits include:
- Control over the scope of cover
- Emphasis on high standards of service
- Long term commitment to providing insurance to Members
- Insurance at cost
Ultimate control of a mutual rests with its Members. This control is exercised effectively through the Directors who are elected by the Members. The fact that the Directors come from the same profession or industry 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 insurance cover to provide
- the Members have the insurance cover they need rather than the insurance cover commercial insurers choose to impose upon them
As mutuals 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 their commercial competitors.
Mutuals 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 do so or only willing to do 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. Mutuals have no profit motive and so are committed to the long term provision of a particular class of business to their Members.
Bar Mutual provides cover for:
- Civil liabilities arising from a self-employed barrister’s practice
- Defending complaints made to the Bar Standards Board
- Claims by solicitors for their fees under approved CFAs
The cover extends to claims brought in any jurisdiction.