The Council for Licensed Conveyancers new indemnity insurance plans have been approved by the Legal Services Board.
The new open market approach will see cover capped at £2 million in aggregate over six years per firm. Firms will be able to apply for cover under the new system from the beginning of next month with insurers already quoting on that basis.
Two brokers have so far signed up to the Participating Insurers Agreement according to the CLC.
Chief Executive of the CLC, Sheila Kumar said: “We are delighted that the Legal Services Board has acted so quickly to approve our proposals. This means that firms and their clients will benefit from the new PII policy terms from the point of insurance renewal this month. Any firms that have not yet submitted proposal forms should do so without delay.”
The CLC say the new approach:
- Ends the master policy scheme with its opt-out provision and moves to a more open-market approach
- Improves consumer protection by ensuring that closed practices will automatically have run off cover in future
- Removes the financial obstacle to orderly closure of firms presented by large run off premiums payable at the point of closure
- Provides firms with improved choice of insurance through a Participating Insurers Agreement
- Reduces the compliance burden on firms by removing the requirement to seek an opt-out from a Master Policy Scheme at PII renewal time
- Streamlines internal regulatory processes at the CLC, making better use of resources