Firms covered by an insurer who was recently placed into provisional administration have been advised that they do not need to take out additional cover.
The Solicitors Regulation Authority released a notice earlier this week which stated that whilst policyholders of CBL Insurance Europe DAC would be unable to obtain a new policy, they would still be covered by the insurer.
According to the Gazette, it is believed that around 200 firms in England and Wales have insurance with the company.
It was announced in February that the Dublin-registered company would be going into administration, with the Central Bank of Ireland stating that there had been a failure to set out adequate provision for debts.
The Bank went on to advise existing policyholders that they should arrange alternative cover as soon as they’re able by contacting the company directly.
Speaking of the insurer’s collapse and what this would mean for firms, the SRA stated: ‘As was the case with a similar situation in 2010, an administration order under Irish legislation does not constitute an “insolvency event” under the SRA Indemnity Rules 2013. There is, therefore, no requirement at this stage for firms insured with CBLIE to seek replacement qualifying insurance within 28 days.’