Have you been unable to renew your professional indemnity insurance?
03 December 2020Professional Indemnity Insurance provides vital protection for clients should unexpected events cause them financial loss.
A significant number of law firms will have had to renew their professional indemnity insurance on or before 1 October 2020. We know that some firms found it difficult to renew policies for whatever reason.
If you were not able to secure a policy in time for 1 October, you will have entered the 60-day cessation period part of the extended policy period (EPP). Under the SRA Indemnity Insurance Rules, every firm that enters the cessation period has an obligation to inform us of their position by emailing email@example.com. Firms should have also let their last recorded insurer know too.
During the cessation period you must not take on any new business. While you can still look for insurance, you must also draw up parallel plans to make sure that, should you not be able to get a policy in place, you can close in an orderly manner and do not continue to trade after the end of the cessation period. Read more information on closing down.
Firms facing practical difficulties in obtaining indemnity insurance because of Covid-19 may want to consider applying for a waiver to extend the EPP but only if their insurer has agreed to that extension.
If you are going through a merger with or being acquired by another firm, it is important that your firm closes in an orderly way if it is not going to carry on as an authorised body and that the appropriate notifications are sent to us. Read more information about notifying us.
If you need further guidance, speak to our Ethics Guidance team.