Credit crunch forces more lawyers to pay higher PI premiums.
The number of law firms paying punishing professional indemnity premiums in the assigned risk pool (ARP) has shot up as the credit crunch bites.
About 146 law firms have been placed in the ARP, up from 100 legal practices a year ago.
The Solicitors’ Regulation Authority (SRA) said it was “not acceptable” that a small number of insurers told law firms at the last minute that they would not be receiving cover.
Zurich grabbed 17% of the pool, followed by Travelers Insurance (16.2%), AIG Europe (15.9%), QBE (14.4%) and Quinn Direct (10.2%), according to initial figures from the SRA.
The ARP is for small law firms that failed to gain professional indemnity insurance by 1 October.
The poor economic outlook has meant many insurers are unwilling to cover smaller law firms.
Rob Adams, SRA client protection director, said: “We are aware of a small number of insurance companies or brokers who left it to the last minute to notify firms that they are not willing to offer terms.
“This is not acceptable and we will be looking at the wording of the qualifying insurer’s agreement, and steps we can take in consultation with the insurers to avoid a similar situation arising in the future.”
An ABI spokesman defended the insurance companies, saying they would always make their best efforts to ensure enough time was available for alternative arrangements.
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