The SRA has announced that it is to consult on only allowing rated insurers to provide professional indemnity cover to SRA-regulated law firms.
According to the Law Society Gazette, SRA board papers reveal that premiums could increase by up to 15{0a6a65c996ed4169444354e707b897cdb00dbefc1d0429e8febb9bf11027ba53} for firms currently with unrated insurers if the SRA insists on using rated insurers in future.“The professional indemnity insurance market is very difficult for solicitors, with some firms finding it hard to secure cover at affordable premium levels,” said Russell Lane, Managing Director, Brunel Professional Risks. “Any move by the SRA which pushes premiums up even further needs to be considered carefully.
“Everyone wants to see a solicitors’ PII market which provides high quality protection to consumers combined with affordable premiums. Rather than looking to restrict the market further, we believe the SRA should think carefully about making insurance more accessible and more affordable for law firms. Relaxing the minimum terms for PII cover would make a significant difference.
“For example if the fraud risk terms were removed or insurers were allowed to void the policy for non disclosure or non-payment of premium, many more rated insurers would enter the market. This would be the quickest way to offer more rated capacity, stable, affordable premiums and remove the necessity for some firms to use unrated markets if they wish to insure themselves and stay in business.”
The SRA has acknowledged that a ban on unrated insurers could create ‘some uncertainty’ in the short term according to report in Solicitor’s Journal with Frank Maher, a partner at Legal Risk, commenting that a ban would impose ‘further pressure’ on firms.
The SRA’s press release announcing the consultation is available here. Details of the consultation, which closes on 24 March 2014 are available here.
