The Hidden Limitations of Management Liability Insurance for Law Firms
If you are your Law Firm’s Compliance Officer for Finance and Administration (COFA) then we would suggest that you to check whether the firm’s current Professional Indemnity Insurance policy includes the cost of Solicitors Regulation Authority (SRA) investigations and, if awarded, fines.
Many primary policy wordings will provide cover for SRA fines (as Regulatory Authority Awards) but the cost of a SRA disciplinary proceeding may be excluded from the definition of ‘Defence Costs’.
By purchasing a Management Liability policy you may think it reasonable that this would provide the required protection, but Solicitor practices need to proceed with caution and understand the potential limitations. A number of Management Liability Policies provide indemnity for the cost of an investigation against any individual acting on behalf of the firm, but the costs of any SRA investigation against the firm may not be covered by the policy.
As specialist Insurance Brokers, we are able to review your existing policy documents and recommend a Management Liability (or Directors’ & Officers’ Liability) Policy that provides an indemnity for the COLPs and Compliance Officer for Finance and Administration (COFAs) and ensures full protection for the practice.
Contact us for a no-obligation review.