SRA provides some breathing space for law firms struggling to obtain PI cover

Miller InsuranceBy Legal Futures’ Associate Miller Insurance

The Solicitors Regulation Authority (SRA) recently published a useful Q&A article on their website which we recommend all law firms take the time to read. It summarises some of the most common queries the SRA has received from solicitors about their rules and the potential impact of Coronavirus.

The article discusses professional indemnity (PI) insurance, specifically the practical difficulties faced due to the impact of Coronavirus and how that is hindering the ability of some firms to renew or secure PI insurance, for example:

  • Some firms that need a new insurer may face delays because of operational issues in the insurance market (for example not being able to contact their broker because their operations have been suspended) and need more time.
  • Key personnel in a firm are unable to complete the renewal process due to illness/being hospitalised/caring responsibilities and therefore need more time to get insurance.
  • Some firms need time to get finance in place to pay for premiums, including potentially access to Government Coronavirus support.

Law firms already benefit from an automatic 30 days Extended Policy Period (EPP) under their PI insurance policy which deals with such scenarios, enabling the firm to continue to trade and accept new instructions during this period. If cover is not secured after that time then firms have another 60 days, called the Cessation Period (CP), in which to continue the search – although they are unable to take on any new work during that time until a new policy is secured.

The SRA is providing additional flexibility for firms by enabling them to secure an extension to their EPP, CP or both, which will require the firm to obtain agreement from the insurer to extend, the payment of any additional premium up-front, and if agreement from the insurer is obtained, the completion of a waiver application form to the SRA.

Our advice: start the process as early as possible

Whilst the intention is well meaning and would no doubt be welcomed, the key is that each case will be considered on its merits and other than in exceptional circumstances, we think it is highly unlikely that insurers will agree to such extensions. Our key advice to law firms is that using the EPP or CP should be an absolute last resort and certainly two of the examples above could be easily avoided by not leaving the renewal to the last minute.

In the current climate we recommend starting the process up to three months ahead of your renewal date, allowing time for any delays or issues that you may encounter. At Miller it is business as usual, so we are confident in renewing our clients’ policies in time.

Questions and quoting

Should you have any queries or concerns relating to your law firm’s insurance then do get in contact with one of our experts. You can also send us your proposal form for a PI insurance quote. Our experts will negotiate with a broad range of ‘A-rated’ insurers to deliver a bespoke and secure insurance deal.


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