Fifteen law firms are to be closed by the Solicitors Regulation Authority (SRA) after failing to secure Professional Indemnity Insurance (PII) according to the Law Society Gazette.
The firms, which were in the Assigned Risks Pool (ARP), the insurer of last resort for practices, will be closed after failing to meet the final 1 April deadline to buy PII in the open market. The full article is available here.The closures underline the importance of firms starting early to present their practices to qualifying insurers ahead of the PII renewal on 1 October 2012. “The key to securing a competitive quote is to demonstrate that your practice is well managed, with effective risk management procedures and a good claims record,” said Dylan Hughes, Director, Brunel Professional Risks. “We offer solicitors an effective risk management service and work closely with our clients to make sure that their insurance proposals portray their firm to qualifying insurers in the best possible light.”
“We are starting our PII renewal campaign for solicitors in May this year, to make sure that all our existing and prospective clients have plenty of time to prepare their proposals and introduce additional risk management procedures if necessary. The 2012/13 indemnity period is the last year that the ARP will exist, and from 2013/14 it is likely that solicitors will only have one month’s grace from their current insurer if they are unable to secure cover. This means that we are likely to see more firms with poor risk management track records closed by the SRA in the future,” said Dylan Hughes.
The Assigned Risks Pool is the insurer of last resort for solicitors’ practices, originally funded by qualifying insurers in proportion to their PII premium income. The 2011/12 indemnity period reduced the time a firm could spend in the ARP from 1 year to 6 months. In 2012/13 the costs of the ARP will be shared between qualifying insurers and the legal profession. The ARP will cease from the 2013/14 renewal and the SRA is proposing that firms which are not offered renewal terms by their insurers are given a 90 day extended policy period of cover. The first 30 days being used by the firm to find alternative qualifying insurance and the next 60 days be used for orderly closure or merger of the practice if it is unable to secure insurance. Full details appear on The Law Society’s website, here.
“Even the best managed firms need to make sure that their PII proposal presents their risk to insurers in a positive light and we are looking forward to working closely our existing and new clients to secure them the best possible terms in the 21012 PII renewal,” said Dylan Hughes.