Indemnity insurance

Professional indemnity insurers will have to disclose their credit ratings to solicitors under plans to be approved by the SRA next month. However, it is to drop the requirement that insurers give policyholders a month’s notice of their intention not to renew cover.

A former senior solicitor at City firm SNR Denton is facing a £600,000 bill after the High Court ordered her to repay the firm and its insurer losses they suffered as a result of her involvement in the payment of a bribe.

Mid-tier law firms are over-engineering their risk management and compliance functions, spending more than both bigger and smaller practices for far less return, new research from Lockton has claimed.

Regulators should empower consumers to drive improvements in the quality of legal services, while professional indemnity insurers could hand over firm-specific claims data to help target poorly performing practices, the Legal Services Board has suggested.

A City law firm is to license out to other practices a matter risk management system that has helped eliminate claims against the firm in recent times and saved around £600,000 a year in professional indemnity insurance premiums.

Our latest news round-up reports on a barrister jailed after stealing £72,500 from his chambers, more problems with the SRA’s online PC renewal system, surveys on fixed fees and compliance, and the appeal court upholding a ruling against a firm innocently caught up in mortgage fraud.

The Law Society and Solicitors Regulation Authority have been granted leave to intervene in a High Court case on whether professional indemnity insurers should be able to effectively cap cover by aggregating claims against a firm – with a bill of £50m at stake.

Solicitors and insurers should share equally any exposure to the assigned risks pool in the 2012-13 indemnity year to ensure insurers have “skin in the game”, the Law Society is to urge. However, the profession’s liability could still reach £30m.

Solicitors paid £256m for the compulsory layer of professional indemnity insurance – the highest amount since the first year of buying insurance on the open market – Solicitors Regulation Authority figures have shown.

Professional indemnity insurers will have to leave quotations open for at least five days and provide information about their credit ratings under plans being considered by the Solicitors Regulation Authority. Voiding policies is also back on the agenda.