Over 160 law firms are set to shut down in December because they haven’t been able to find professional indemnity insurance cover.
Firms were supposed to have PI insurance in place by 1 October, but 185 had to apply to the SRA for a 90 day extension. Most of those had been royally shafted in June when their unrated Latvian insurer, Balva, turned out to be as rock solid as an unrated Latvian insurer sounds, and went into liquidation.
Brokers ARPO Management lined up German insurer Berliner to replace it, and many of the firms signed up. Unfortunately, just three weeks before the SRA deadline, Berliner suddenly announced that it had to withdraw from the market too, leaving them high and dry.
The affected firms can carry on as normal until 1 November. After that, they cannot accept new instructions. And come the end of December, they will have to close unless they have secured insurance. Which may be very difficult as many of those insurers who haven't already shut their books are likely to have stricter eligibility criteria than Berliner and Balva - or premia that may be unaffordable.
A spokesman for the SRA told RollOnFriday that of the 185 firms which applied for an extension, 163 have still not been able to find cover. So it looks like good news for Slovenian and Lithuanian insurers wanting to enter the UK market.
RollOnFriday asked ARPO if it had any comment, but it refused to provide one.
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Firms were supposed to have PI insurance in place by 1 October, but 185 had to apply to the SRA for a 90 day extension. Most of those had been royally shafted in June when their unrated Latvian insurer, Balva, turned out to be as rock solid as an unrated Latvian insurer sounds, and went into liquidation.
Brokers ARPO Management lined up German insurer Berliner to replace it, and many of the firms signed up. Unfortunately, just three weeks before the SRA deadline, Berliner suddenly announced that it had to withdraw from the market too, leaving them high and dry.
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Balva, until recently |
The affected firms can carry on as normal until 1 November. After that, they cannot accept new instructions. And come the end of December, they will have to close unless they have secured insurance. Which may be very difficult as many of those insurers who haven't already shut their books are likely to have stricter eligibility criteria than Berliner and Balva - or premia that may be unaffordable.
A spokesman for the SRA told RollOnFriday that of the 185 firms which applied for an extension, 163 have still not been able to find cover. So it looks like good news for Slovenian and Lithuanian insurers wanting to enter the UK market.
RollOnFriday asked ARPO if it had any comment, but it refused to provide one.
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