The number of law firms facing closure after failing to secure professional indemnity insurance has jumped to 175, the Solicitors Regulation Authority (SRA) announced today. The figure is more than double the total of 69 announced as the renewal deadline closed last week and an eight-fold rise on last year.
Professional indemnity insurance is a compulsory requirement of all UK law firms stipulated by the SRA and those that are unable to obtain cover will be closed down, without exception.
Until recently law firms unable to obtain cover could enter the Assigned Risks Pool. This was a facility for 'distressed risks' underwritten by UK insurers which provided temporary cover for up to two years. However, this arrangement was abolished and now closure is the only option for those firms unable to secure cover.