The new arrangements for professional indemnity insurance come into effect in four weeks' time.

Solicitors now have the choice of purchasing their indemnity cover from a number of qualifying insurers.

These qualifying insurers have signed an agreement with the Law Society to provide cover on the terms set out in the solicitors indemnity insurance rules.ASSESS THE OPTIONSOne of the qualifying insurers, St Paul International, has entered a joint venture with the Society to provide cover through a managing general agency which will utilise the existing infrastructure of the Solicitors Indemnity Fund.In the past week, St Paul International has sent many firms a quote.

However, in some cases it has notified firms that it is unwilling to quote in the existing circumstances.

In order to ensure that firms secure the best premium possible, solicitors may, of course, wish to seek quotes from some of the other qualifying insurers.

Those firms that have not done anything to investigate the market to date, should not delay any longer.One or two qualifying insurers may approach your firm directly, but most will prefer to go through brokers.

You, in turn, may receive approaches from brokers offering to negotiate indemnity cover for you.

Ensure that they have experience in arranging professional indemnity insurance and check carefully the commission arrangements.

You may wish to consider appointing brokers on the basis of a fixed fee with any commissions being paid to you.

You do not have to use a broker but, in that event, you should be prepared to spend considerable time in assessing the options.FIRMS MUST ACT NOWIf firms have not taken any steps to secure professional indemnity insurance cover from 1 September onwards, they must act now as the consequences of not doing so could threaten the continuance of the practice.

It is important to realise that it is still compulsory to have professional indemnity insurance.

Firms that do not have cover are not permitted to stay in practice.Many firms with a good claims record might be able to secure lower professional indemnity insurance premiums than in the past under the mutual fund.

However, firms with poor claims records might find that the premiums being quoted are much more expensive.It is likely that some firms will not be able to obtain a quote from any of the qualifying insurers.

In this instance, firms will have to apply to join the assigned risks pool.

Firms will be able to stay in the pool for only two years.

If, after that time, a firm cannot obtain professional indemnity insurance from a qualifying insurer, it will have to close.

The premiums in the assigned risks pool will be high and even higher if a firm does not apply to join the pool before 1 September.Firms, which do nothing before 1 September, but continue in practice without professional indemnity cover, will be 'firms in default'.

Each principal in the firm will have committed a disciplinary offence and the firm will have to pay an assigned risk pool pre mium 20% above the standard rate.Some firms might take the view that, in the light of the cost of remaining in practice, they would prefer to close.

Guidance to firms considering closure is available from the Law Society's professional ethics department.

It is important that solicitors ascertain the position of their firms without delay.MAKING ARRANGEMENTSThe Law Society, the Solicitors Indemnity Fund and St Paul International have between them sent all firms information over the past few months which will help in making arrangements.Solicitors who have not acted yet, should immediately gather and review the following information:-- The details of the firm's claims record sent by SIF in June 2000.-- The quotation from St Paul International sent to the firm in the past week, or notification that it is not willing to quote.There are some additional sources of helpful information:-- The Solicitors Indemnity Rules 2000 sent to firms by the Law Society in June 2000.-- A copy of the advice leaflet 'Your firm has only until 1 September to arrange professional indemnity cover' sent by the Law Society in mid-July.-- Details of all the qualifying insurers, the text of the solicitors indemnity insurance rules, and general advice, is available on the Law Society's Internet site on www.indemnity.lawsociety.org.uk This site also has links to the Gazette Internet site at www.lawgazette.co.uk for previous articles in this series.-- Solicitors can telephone the Law Society's practice advice service on 0870 606 2522 However, the Law Society cannot advise solicitors regarding specific circumstances or on which insurer a firm should choose.-- Solicitors considering ceasing practice should consider contacting the Society's professional ethics guidance service on 0870 606 2577.