Ailing Independent puts indemnity cover at risk

Brokers for the troubled insurance underwriter Independent - which was placed into provisional liquidation last month - are advising law firms with Independent indemnity policies to find alternative underwriters.It is not known whether the company's assets will be sufficient to satisfy insurance claims in full, nor when claims will be paid.

Provisional liquidator PricewaterhouseCoopers is currently investigating.In the event that claims could not be met, solicitors may have recourse to the Policyholders Protection Board; however, the board only pays 90% of claims made against insurance companies in liquidation.Broker SBJ Professional has written to solicitors underwritten by Independent advising them that they may wish to seek alternative cover, but warning that replacement would cost firms an additional premium.Michael Rendell, director of broker PYV, maintained that most of the top 30 City firms had some cover with Independent.

He said action would probably already have been taken by these firms or their brokers to seek alternative cover.Meanwhile, specialist class action firm Class Law has set up an group to represent Independent policyholders, trade creditors and employee shareholders.

Class Law has set up a Web site and instructed leading counsel.David Greene, a partner at London law firm Edwin Coe, representing Independent's shareholders, said: 'We have decided to carry out independent investigations - apart from those of the general creditors - to protect their 'distinct interests'.Edwin Coe acted for the BCCI shareholders following its liquidation.Jeremy Fleming