Bar Council warns members they must buy more cover on open market
The professional indemnity insurance (PI) market is set to receive a boost after barristers were warned to buy more PI cover on the open market.
The warning came following a study carried out by the Bar Council's legal services committee.
It concluded that a large number of barristers were carrying out work where they faced exposures exceeding the limits of their cover.
The maximum amount of cover available under the terms of the Bar Mutual Indemnity Fund (BMIF) is £5m.
The Bar Council letter to its members said: "There will be those who practise in some areas (for example tax or commercial work) where the potential for exposure will often be many times that amount [£5m].
"Further cover above £5m can be obtained on the open market and BMIF includes a section on its renewal form to assist barristers to purchase this cover from reputable brokers who specialise in this area," the letter said.
The BMIF requires self-employed barristers to hold a minimum of £250,000 in PI cover.
But this figure, which was set more than 20 years ago, is viewed as being too low. By comparison, solicitors are required to have a much higher level of cover under solicitors' indemnity rules, which set the minimum at £1m.
But brokers do not expect a boom in barristers purchasing cover on the open market. Alexander Forbes Professions director Trevor Moss said: "The cover provided by the BMIF is relatively low in relation to the solicitors' profession. Most barristers would be shocked at the price of higher levels of cover - I don't think many will rush for it."