Property law regulator launches consultation on changes to professional indemnity insurance

The regulator for property and probate lawyers, the Council for Licensed Conveyancers (CLC), has launched a consultation to update its policy on professional indemnity (PI) insurance requirements for conveyancers and probate lawyers.

All firms regulated by the CFC are required to have PI insurance in place to safeguard consumers’ assets and savings.

As part of its consultation, the CLC is revisiting its open market scheme. Originally launched in 2016, this provides standard minimum terms and conditions (MTC) and is governed by a Participating Insurers Agreement (PIA).

This agreement means that CLC-regulated practices can seek cover from any insurer that is part of the scheme. It also provides access to a minimum level of £2m worth of cover for claims, including run-off cover should firms close.

CLC hopes revisiting the scheme will ensure its PI arrangements are “fair and fit for purpose in the future”, according to its chief executive Sheila Kumar.

The consultation, which will run until 25 February 2022, is seeking feedback from regulated firms, insurers, consumers and other industry professionals.

PII market pressures

This consultation follows the regulator’s call for evidence on the operation of its PIA for PI insurance last year.

Areas under review include the integrated run-off provided by the MTC, the approach to excesses set by insurers and whether standalone cyber insurance should be mandatory.

Discussing why the consultation is timely, Kumar said: “We have seen examples of firms being refused cover because of work carried out in the past, even if any notified circumstances do not proceed or they no longer undertake that type of work.

“Another issue is that new and transferring firms have found it difficult to secure quotes in a timely way from participating insurers.

“We are keen to hear from as many interested parties as possible.”

Any changes to the scheme will be agreed by the CLC in March - these will then be submitted to the Legal Services Board for approval ahead of the PI insurance renewal deadline in June.