The number of law firms failing to renew their professional indemnity insurance (PII) has fallen by nearly 70{0a6a65c996ed4169444354e707b897cdb00dbefc1d0429e8febb9bf11027ba53}
The Solicitors Regulation Authority Board said that 49 firms entered the ‘cessation period’ after failing to renew their PII as at 6 January. This compares with 153 firms a year earlier.
The fall comes despite the Legal Services Board refusing to reduce the minimum level of PII cover from £2 million to £500,000 in November 2014. The LSB said the move would be prejudicial to regulatory objectives and contrary to the public interest.
The SRA has written to all the firms without insurance to outline their responsibilities. A firm in the cessation period can only handle existing instructions while they have 60 days to seek a new insurer. Already 12 firms have told the SRA that they intend to close.
According to a report in Legal Business, the SRA says that “the status of the remaining 37 is unclear at present, especially because more firms are increasingly taking advantage of the flexible renewal date, which provides an extended policy period.” The SRA intends to publish a list of all the firms which do not have PII.
“The fall in solicitors failing to renew their PII cover is good news for the profession, but firms should not take their eye off the ball,” said James Page, Associate Director, Brunel Professional Risks. “With flexible renewal dates now available, seeking PII cover is a year round opportunity. Firms can now renew their insurance early or seek a longer period of cover. We recommend that solicitors speak to us as early as possible, rather than leaving it until the traditional PII renewal period. We are also seeing a trend in firms who want to stand out from the crowd moving from a 01 October renewal date, and it is currently becoming a “badge of quality”. There is a danger that the O1 October renewal date will increasingly acquire negative connotations, as it will be favoured by firms still trying to be lost in the crowd.”
