Firms covered by collapsed insurer Enterprise have less than three weeks to find an alternative provider.
In an update published by the Solicitors Regulation Authority, it was confirmed around 50 firms have professional indemnity insurance with Gibraltar-based Enterprise Insurance.
The Gibraltar Financial Services Commission last month ordered the unrated insurer to stop writing any new business after it was declared insolvent and entered liquidation.
Law firms with a potential claim based upon current, prior or run-off policy cover have been advised to notify Enterprise ‘as a matter of priority’.
It has also been confirmed firms in practice with a current policy have until 22 August to find replacement cover.
The SRA has contacted all firms insured by Enterprise to advise on their next steps and will provide ‘dedicated support’ during this process.
‘Firms that might be affected might want to contact their brokers to discuss any open claims, or other relevant issues,’ said the SRA.
‘Firms should continue to notify Enterprise or their broker of any new claims received against their existing policy until such time as replacement cover is in place, and these claims will also be managed by the liquidator.’
Although just 50 law firms have current cover with Enterprise, the insurer has been in the PII market since 2011 and is believed to provide run-off cover for many more practices that have since closed down.
The UK Financial Services Compensation Scheme (FSCS) has confirmed that if it establishes Enterprise cannot meet the cost of claims made against it, it will protect UK policyholders if they meet certain eligibility criteria.
For example, this applies to UK policyholders who are individuals or small businesses with a turnover of less than £1m and who have professional indemnity insurance.
Frederick White of Grant Thornton has been appointed as liquidator of Enterprise. He said last week that insurance policies issued by Enterprise have not been cancelled or disclaimed, but that he was currently unable to pay any claims arising under such policies.
Grant Thornton said it was also ‘uncertain’ if the company’s assets would be sufficient to meet insurance claims in full.