53 firms fail to find PI insurance for renewal season, enter ARP

In the wake of the solicitors’ professional indemnity insurance renewal deadline of October 1, the Solicitors Regulation Authority has offered confirmation that at least 53 firms neglected to secure professional liability insurance by the deadline and now face entering the Assigned Risks Pool.

According to the SRA, last year more than 400 solicitor firms applied for entrance into the ARP by the October deadline. ¬†Authority chief executive, Antony Townsend, remarked that key changes to how client financial protection was arranged were approved by the SRA board this past April, where one of the largest challenges facing the SRA was the need for better management in reducing the number of solicitor firms within the Pool during the consultation process for the changes, and the drastically reduced number of firms entering the ARP indicate that the Authority’s reform programme is working as intended.

The SRA board is continually monitoring how these changes are affecting not only ARP firms, the chief executive said, but also smaller solicitor firms who may have heightened vulnerabilities to business liability insurance premiums.  The changes include the amount of time solicitor firms are permitted to remain in the ARP has recently being reduced to six months, down from 12, as well as being jointly funded by both the profession and qualified insurers from October of next year.

Claims liability from firms who do not have the proper insurance will move to the Compensation Fund from the ARP until the pool’s replacement in October of 2013, where a new system of insurance providers offering three month extended policies to solicitor firms unable to secure insurance on the open market will come online.

 

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