News release

153 firms enter Cessation Period

A total of 153 solicitors firms have entered the second section of the new Extended Policy Period (EPP), having failed to secure new professional indemnity insurance cover.

The Solicitors Regulation Authority (SRA) had been notified of 226 firms that wished to invoke the 90-day EPP, with 73 having since secured insurance. The period is split into two parts; the first 30 days is called the Extended Indemnity Period (EIP) when firms can carry on as normal, the second is called the Cessation Period (CP) when firms can only deal with existing instructions while they seek an insurer.

The 30-day EIP ended at midnight yesterday (30 October), meaning the 153 remaining firms should have entered the CP. These firms now have until 6 November to notify the SRA and their insurer of their situation. At the end of the CP on the 29 December, firms without a new policy will have to close. Previously, firms entered the assigned risks pool (ARP), but this closed on 1 October 2013 (apart from issues involving prior-year obligations and run-off cover).

This was one of the last changes to be made as part of the review of the Client Financial Protection Arrangements designed to ensure the market for professional indemnity insurance remained competitive. The other final changes made this year were:

  • The single renewal date has been removed for any policy starting on or after 1 October 2013
  • The ‘side arrangement’, whereby coverage was provided to uninsured firms that had not applied or were not eligible to enter the ARP, was withdrawn with effect from 1 October 2012. Instead claims arising from such firms will be considered by the Compensation Fund
  • "Qualifying" Insurers has changed to "Participating" Insurers, to reduce any misunderstanding that the insurers involved have undergone any vetting by the SRA

Notifications from firms should be made in writing to, stating who the firm's insurer was for 2012/13.

Further information on professional indemnity insurance is available here:

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