Firms urged to start insurance renewals in good time
Those firms that are due to renew their professional indemnity insurance from 1 October are reminded that it is better to start the process sooner rather than later.
Two thirds of solicitor practices have policies that run until 30 September. And the Solicitors Regulation Authority (SRA) is urging those that have not yet been in touch with their insurer or broker to put cover in place for 2016/17, to do so as soon as possible.
Compulsory indemnity insurance is one of the key protections for clients of regulated firms. Applying can take time, as insurers assess a firm’s risk profile and claims history. That is why starting negotiations early is recommended.
Jane Malcolm, SRA Executive Director for External Affairs, said: “There are still some weeks to go until the majority of insurance policies expire, but we would urge any firm that has not started the renewal process to do so sooner rather than later. Giving the insurers plenty of time to process applications makes sense for everyone.
“It is important that the public and businesses are certain that they will be getting that extra layer of protection when they choose a regulated law firm. So we want the renewals process for those firms needing new policies from 1 October to run as smoothly as possible.”
Information for firms on indemnity insurance can be found at www.sra.org.uk/indemnity
Those firms that do not renew by 30 September, for whatever reason, and continue to practise will enter the Extended Policy Period (EPP). The EPP ensures that further cover is provided by the last-named insurer for the firm for a further 90 days.
The firm can use this additional time to secure a new policy. However, after 30 days it cannot take on any new business and must draw up parallel plans to ensure that, it can close in a proper manner at the end of the 90 days if it does not find cover. Not all firms that enter the EPP do so because they cannot get a new policy – some use this time to complete mergers and sales, or to finish closing their practice.
The SRA is the regulator of solicitors and law firms in England and Wales, protecting consumers and supporting the rule of law and the administration of justice. The SRA does this by overseeing all education and training requirements necessary to practise as a solicitor, licensing individuals and firms to practise, setting the standards of the profession and regulating and enforcing compliance against these standards. Further information is available at www.sra.org.uk