Firms warned to confirm insurance position

Firms warned to confirm insurance position

The Solicitors Regulation Authority (SRA) has warned firms that have not declared their insurance position that they are breaching regulations and face enforcement action.

Firms had until the 6th November to inform the SRA if they had failed to secure new professional indemnity insurance cover and were entering the second section of the new Extended Policy Period (EPP).

79 firms got in touch, but 238 firms originally said they wished to invoke the EPP and only 108 have since secured cover, leaving a large number of firms unaccounted for.

Rule 17.3b of the Indemnity Insurance Rules states "Each firm shall notify the (SRA) and its participating insurer in writing as soon as reasonably practicable and in no event later than five business days after the date on which the firm enters the cessation period under its policy".

Notifications from firms should be made in writing to [email protected], stating who the firm’s insurer was for 2012/13.

Agnieszka Scott, Director for Policy and Financial Protection, said: "So far we have shown a lot of understanding towards firms that have been late in letting us know their insurance position, but now, more than a month later, there really is no excuse.

“It is a requirement in the regulations that firms inform us of their situation and from now on, we will have to think about appropriate enforcement action for those that fail to contact us.

"What these firms need to remember is that if they failed to secure a new policy by 1 October, they automatically qualified for the Extended Policy Period and are therefore still practising with insurance.

“They won’t be automatically closed down if they tell us they don’t have a new insurer yet, but they are in breach of the insurance regulations by not contacting us."

The SRA is still collating information on the amount of cover insurers have written. When this information is available, the SRA will publish this on its website.

In the meantime, firms should be careful who they accept undertakings from.

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