Liberty Mutual-backed ABC Insurance has requested an urgent review of the NSW Attorney-General’s decision stopping it from providing professional indemnity cover for solicitors.

“ABC Insurance is disappointed by the unnecessary intervention that blocks competition, hurting lawyers and their clients through higher insurance costs,” a spokesman told insuranceNEWS.com.au.

“We have requested an urgent review of the decision and hope to achieve a positive outcome that drives premium decreases and policy innovation.”  

ABC sought approval to offer its policies for the 2026-27 practising year, ending a monopoly held by Law Society-owned Lawcover.

The Attorney-General’s reasons for declining the application include unsupported assertions such as on the “special features” of solicitors, as distinct from other professions including barristers who have access to choice, the insurer says. 

“This simply cannot be a threshold for market intervention,” the spokesman said.

Attorney-General Michael Daley told a Budget Estimates hearing last week he considered public interest factors for and against allowing the ABC policy, including that competition could drive lower premiums and innovation.

“However, the solicitors’ professional indemnity insurance market has some special features that may impede the full benefits of competition,” he said.

Mr Daley said his role in approving legal PI cover resulted from “the various provisions of the uniform law”, and having a competitive market was only one consideration.

“I think the stability of the scheme and the fact that we need a stable insurance market – costs are reasonable and in line with other jurisdictions – that’s important as well,” he said.

“We’ve had experiences in the past with HIH, where insurers have gone under and governments have had to step in.”

The decision, published on the Communities and Justice Department website, says actuarial advice prepared by Deloitte in October 2024 was considered. It also raises long-term repercussions.  

“There is a substantial risk of premium volatility and more general market volatility as new insurers come and go based on the viability of the market to provide profit,” it says.

Market volatility has historically caused problems for legal practitioners and consumers, and necessitated significant government intervention, it adds.

ABC Insurance was also rejected last year when it sought to offer PI cover for the sector.

The arrangements apply to the 70% of state solicitors and firms operating solely in NSW.