24 hour helpline:
Unfortunately, it is a sign of the times that insolvency of participating insurers is sufficiently prevalent, or the risk of it sufficiently real for many practices, that the Law Society has felt the need to issue a new Practice Note on the issue.
Hopefully, you will never be in the position of your practice’s professional indemnity insurer becoming insolvent and of it being more a case of knowing that such Law Society guidance exists, rather than having knowledge of its detail. However, the following key points may be worth knowing:
ACTION: the main message you should take away is the importance of satisfying yourself about the insolvency of your PI insurer before obtaining insurance and not selecting your insurer based solely on the amount of the premium: any particularly low premiums should be viewed circumspectly. Refer to the Law Society’s guidance on insurers’ financial security and ratings of insurers published in 2014 (https://www.lawsociety.org.uk/support-services/advice/articles/pii-insurer-insolvency).
If you do have any concerns about your current insurer’s solvency or are notified that any preliminary steps have been taken by the company or its creditors in relation to your insurer’s solvency, you should review your position as soon as possible, including the cost, notice periods and other implications of terminating your PII policy and arranging a replacement policy. At the very least, you should ensure you collate and update all necessary information to enable you to obtain some quotes and if necessary, put in place a new policy as a matter of urgency, if it progresses to insolvency.
Contact your insurance broker or LBS consultant if you require any assistance placing your insurance or if your insurer becomes insolvent.
Client Relationship Manager
T: 0113 385 4483
M: 07432 695 289
The Law Society has issued a practice note about the risks to solicitors posed by this new legislation, which came into force on 30 September.
The SRA has urged all practices to check HM Treasury’s consolidated list of asset freeze targets, which lists designated persons subject to financial sanction under EU or UK legislation.
The practising certificate renewal period opened on Monday 2 October.
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