185 firms apply for extended cover
The SRA has revealed that 185 firms have applied to them for the extended indemnity period (EIP) of insurance, having failed to secure cover by 1 October.
Previously firms would have been to apply to enter the Assigned Risks Pool (ARP), where the whole profession and all participating insurers covered any liabilities, however this was removed as part of a package of changes made to financial protection this year.
Firms now receive 90 days further cover from their old insurer while they try to obtain a new policy.
If they cannot get cover, then the firm must close at the end of those 90 days as solicitors’ firms cannot operate without professional indemnity insurance.
The firms had five working days to inform the SRA if they wished to enter the period, although there are some which may not have yet done so.
Any that have failed to notify of their intention to apply for an extension should do so as quickly as possible by e-mailing [email protected], stating who their previous insurer was.
The number of firms affected is likely to change within the 90 days, however in the meantime what impact will this have on firms accepting undertakings from these firms? Are you concerned about dealing with the firms affected?