Fewer law firms in mutual of last resort and more leaving
Insurance brokers have helped solicitors buy commercial professional indemnity PI cover to escape the Solicitors Regulation Authority’s (SRA’s) assigned risk pool (ARP), the Law Society Gazette reports.
The Gazette says 256 law firms were in the ARP, the mutual insurer of last resort for firms unable to buy PI cover from insurers. That is lower than the 500 predicted.
The SRA said that the number is ‘fluctuating every day’. Some firms with no PI cover have not yet applied to enter the ARP. The SRA may cut premiums to the ARP, normally 27.5% of a firm’s turnover.
Not insurers’ fault
The Times reports that insurers have good reason to raise premiums. “There is an unprecedented number of claims,” it quotes Martin Ellis, head of the solicitors’ practice group at the broker Prime Professions, “mainly driven by the economic situation and the property collapse.”
Jonathan Davies, assistant general manager at Travelers Professional Risks, points out that insurers cannot share a firm’s risk or put in place exclusions or set conditions. It must either insurer or not. “It’s easier to say no”.
One insurer reports that a quarter of his existing customers had not returned their proposal forms by 28 September.
