The Law Society has welcomed the LSB’s decision not to approve the SRA’s application to reduce the minimum level of PII cover from £2m to £500,000
The Legal Service Board (LSB) has decided not to approve an application from the Solicitors Regulation Authority (SRA) to reduce the minimum level of professional indemnity insurance (PII) cover for SRA-regulated firms (including sole practitioners and partnerships) from the current level of £2m (£3m if a firm is incorporated) to £500,000.
It has, however, approved other parts of the SRA’s application – those relating to the introduction of a new outcome in the SRA Code of Conduct 2011 requiring firms to assess and purchase an appropriate level of PII, and to further technical amendments to the SRA’s regulatory arrangements, including amendments to the SRA Glossary.
The Law Society welcomed the LSB’s decision. Law Society President Andrew Caplen, said:
“The Legal Services Board’s decision to refuse the reduction of cover to £500,000 is good news for consumers and firms. If implemented, the changes would almost certainly have increased risks to consumers and costs for firms. That amount of cover would be insufficient for the vast majority of firms and would be unlikely to result in any significant lowering of premiums. Firms would therefore need to purchase top-up cover, which would be likely to cost more than buying the comprehensive package under the current minimum terms and conditions and could contain small print exclusions.”