Law Society warns on PI Insurance
The Law Society has warned that firms using unrated insurers are putting themselves at risk of regulatory sanctions if the insurer becomes insolvent.
Unrated firms are those without a published credit and financial strength rating.
They are increasingly being used by cash-strapped firms who are struggling to keep up with the steady cost of PII.
The Law Society has expressed concerns that in this renewal season the number of firms using this type of insurer is increasing.
Elliott Vigar, head of regulation, Law Society, said: “This suggests both that, in some fundamental respects, the market in its current form is not working for a segment of the profession; and that a proportion of firms continue to make a purchasing decision based purely on price.”
The Law Society said that the risk of insurer insolvency is very real with firms such of Lemma having gone into liquidation in October.