Up to 500 firms may eventually be forced to join the legal profession's indemnity safety net scheme because they have failed to make their own insurance arrangements, risk services company Alexander Forbes claims.
More than 40 solicitors' practices have already entered into the assigned risks pool (ARP) for their professional indemnity insurance and this may be only the tip of the iceberg.
Alexander Forbes says that up to 20% of firms that find themselves in the ARP may be able to get cover in the commercial market, but those firms which spend two years in the ARP leave themselves liable to withdrawal of their practice certificate.
Colin Taylor, divisional director of Alexander Forbes Professions, said: “Many firms in the ARP will have poor claims records and won't be able to get cover from commercial insurers, but there are others who have simply failed to present their case properly to underwriters – or just ran out of time.”
