Law firms that were insured by the now insolvent Enterprise Insurance have until today to arrange alternative cover.
The Solicitors Regulation Authority (SRA) said on Friday that around two-thirds of the 43 firms that were with the Gibraltar-based insurer have already secured alternative cover.
Enterprise was declared insolvent by the Gibraltar Financial Services Commission last month and the firms involved had 28 days from that time to arrange alternative cover. That period ends today.
Crispin Passmore, SRA executive director of policy, said: “We have been working closely with the firms involved to keep them up to date and support them as they secure cover. These firms are aware of their responsibilities and are acting accordingly.
“We have made it clear that it is essential to let any potential new clients know about the situation. We have also told firms that we expect them to make sure existing clients are aware of what is happening…
“Timelines are short and these are challenging circumstances, so we are taking a constructive approach, and will continue to do so. The important thing is that the firms arrange new cover as soon as possible.”
The UK Financial Services Compensation Scheme (FSCS) has confirmed that if it establishes Enterprise cannot meet the cost of claims made against it, it will protect UK policyholders if they meet certain eligibility criteria, such as being UK policyholders who are individuals or small businesses with a turnover of less than £1m.
Enterprise has been providing cover since 2011, so firms other than those with live policies might have open claims. There will also be firms that might have closed during this period and have run-off insurance with Enterprise.
All claims will now be dealt with by the provisional liquidator with the support of the Gibraltar Financial Services Commission, whose chief executive, coincidentally, is former top SRA official Samantha Barrass.
The most recent statement from the provisional liquidator said: “Insurance policies issued by Enterprise have not been cancelled or disclaimed but I am unable to currently pay any claims arising under such policies. It is also uncertain if the company’s assets will be sufficient to meet insurance claims in full.”