Some 300 solicitor firms insured with a collapsed Irish provider of professional indemnity insurance will be protected by a safety net scheme.
The Financial Services Compensation Scheme declared CBL Insurance Europe DAC in default last month, and has now stepped in to protect the majority of policies sold in the UK.
The insurer, which accounted for around 1% of the solicitors’ market largely composed of small firms or sole practitioners, has been in administration since 12 March and ceased paying claims last December. Policyholders were advised at this stage to contact their broker to arrange alternative cover as soon as possible.
On 20 February the Central Bank of Ireland lodged a petition with the Irish High Court seeking a winding-up order and to have a liquidator appointed. This action was taken in the best interests of protecting policyholders, and the matter is due before the High Court this week.
Jimmy Barber, chief operating officer at the compensation scheme, said: ‘FSCS is working closely with the administrator and the Central Bank of Ireland to make sure that any eligible policyholders are protected. FSCS will protect most UK-based customers of CBL who are either individuals or small businesses with an annual turnover of less than £1m.’
As well as indemnity insurance, CBL also wrote credit and financial surety insurance, property insurance and travel bonding.
Kieran Wallace of KPMG LLP has been appointed as provisional administrator of CBL.