Indemnity insurance renewals in a tough market

News

17 September 2020

It has long been reported that the insurance market is hardening, which might mean premium increases, and that firms should engage with brokers/insurers early to look at renewal terms. We put out reminders on this in April, and these were repeated by the Law Society at the end of July to start the process early in light of the additional complications brought on by the pandemic.

Some brokers might be experiencing delays in their operations because of coronavirus and the Law Society has provided a range of resources on its website. The Law Society has also confirmed that it is helping firms, including with advice on government support. If you need help about this contact:coronavirus@lawsociety.org.uk.

If you cannot secure a new policy

Firms that have not renewed their policy for whatever reason and continue to practise will enter the Extended Policy Period (EPP).

The EPP makes sure that further indemnity cover is provided by the last-named insurer for the firm for a further 90 days. The firm can use this to secure insurance, however, after 30 days it cannot take on any new business.

It must also draw up parallel plans to make sure that, should it not gain cover, it can close in an orderly manner at the end of the 90 days. Read more information on closing down your practice.

Under the Indemnity Insurance Rules, every firm that enters the EPP has a duty to inform us and their insurer of their position (see Rule 8.1).

Further information is available on our indemnity insurance page.