SRA agrees SIF extension

professional indemnity insurance SIF

The Solicitors Regulation Authority (SRA) has announced that it has agreed to extend by a year the use of the Solicitors Indemnity Fund (SIF) to provide post six-year run-off cover for claims against firms which have closed without a successor practice. This additional cover is separate from the mandatory six-years run off cover which firms are required to have in place, and which participating insurers provide. It is not a regulatory requirement.

In 2000, when the Law Society closed SIF down and moved to open market insurance, it was decided that SIF would continue to provide additional post six-year run off cover until 30 September 2017.  It was later agreed that this would apply to claims notified to the SIF before 30 September 2020. Despite a further extension request having been turned down in 2016 it has now been decided to extend the use of the SIF for post six-year run off cover for another 12 months until 30 September 2021. The Board of the SRA had been asked to look at a range of options in the light of a request by the Law Society to push the closure of the SIF back by three years to 2023. Advice considered by the Board of the Solicitors Indemnity Fund Limited indicated that was not affordable, but a shorter extension would be possible.

The Board recognised that alternative products to the protection afforded through the SIF had been slow to develop – a position apparently exacerbated by the current hardening market and the insurers desire to focus on mandatory cover. The Board concluded that the additional 12 months will allow affected firms, solicitors and insurers to consider the development of products that can offer post six-year run off cover for those who want this additional insurance.

Anna Bradley, Chair of the SRA Board, said:

“We know that the insurance market has been hardening and that products for post six-year run-off cover have been slow to develop. This further extension of the use of SIF to provide that extra cover – which is on top of our regulatory requirements – gives firms and insurers more time to focus on developing additional insurance for those who are interested.

“We urge those affected to use the next 15 months to work with insurers, brokers and the wider profession on products that suit their needs, prior to SIF finally closing.”

For more information see SIF – post six years indemnity

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