Emergency cover: hefty premiums for firms need to stay in the ARP
The anticipated deluge of law firms entering the assigned risks pool (ARP) has not materialised, but the numbers are still large, Legal Futures can reveal.
With the 1 October renewal deadline now passed, the Solicitors Regulation Authority reports that it has received 409 applications for the ARP compared to 411 last year. The exit of Quinn and general market conditions had led to predictions that anywhere between 700 and 2,000 firms entering the ARP, although new insurers have since entered the market, with a particular focus on smaller firms.
The 409 firms are now in the four-week grace period during which they can put in a protective application to be backdated until 1 October in case they do not find cover on the open market. Experience from previous years suggests that a good number of firms will be able to escape the pool by the end of the month.
Cover for firms in the ARP starts at 27.5% for the first £500,000 of gross fees for a partnership, and 30% for a limited liability partnership.
There are currently 214 firms in the ARP and the SRA has been cracking down on those which have failed to pay their premiums (see story).
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