2010-10-15

By Editor, CIR

A range of initiatives, combined with new qualified insurers entering the professional indemnity insurance (PII) market, has staved off the predicted high numbers of legal practices being forced into securing emergency cover in the assigned risk pool (ARP), according to the Law Society.

Early indications show that the range of Law Society initiatives, combined with new qualified insurers entering the professional indemnity insurance (PII) market, has staved off the predicted high numbers of legal practices being forced into securing emergency cover in the assigned risk pool (ARP).

Currently 396 legal practices have been unable to secure cover on the PII market and have had to seek insurance in the ARP. However, many of those in the ARP can leave it and find alternative insurance from qualified insurers.

Commenting on the findings, Law Society chief executive Desmond Hudson says: "Very early indications on the basis of information that we have received suggest that numbers in the ARP in the immediate aftermath of the 1 October renewal may not be as high as has been predicted by many market commentators. That is not to ignore the severe pricing pressure parts of the profession faced.

"This figure will, at least initially, be subject to daily fluctuation as firms exit the pool through obtaining market insurance, merge or cease trading. Though the picture is not yet clear, it appears that the entry of a number of new qualifying insurers to the market, serving that part of the profession who have previously faced the greatest challenges in obtaining cover, coupled with the range of Society initiatives this year to assist the profession has had some positive impact on numbers."

As well as the Law Society PII Helpline, which relaunched over the summer, the Society has provided practice notes on renewing PII and guides for the profession on qualified insurers and brokers.

In the final build up to the deadline, the Society launched its SafetyNet initiative to assist distressed legal practices in securing cover. The scheme remains available to legal practices currently in the ARP.

Desmond Hudson adds: "The size of the total premium pot for the profession for this renewal remains to be determined. The Society will continue in its efforts to assist members of the profession currently in the ARP to exit within the 30 day window and beyond, through the dedicated PII helpline and via the 'Safety Net' scheme operated in conjunction with brokers PYV."

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