The much heralded reduction in Solicitors Professional Indemnity minimum cover, proposed by the SRA last month, has been held in the sidings as the Legal Services Board say they need longer to consider the issue.

While, as suggested in this column in recent weeks, it is unlikely that many firms would take up the opportunity of a lower level of indemnity ('LoI'), for those firms considering it, they are left with a conundrum.  The LSB has said that it will take up to 90 days to make a decision - but it is conceivable that they could decide earlier - leaving open the question of whether a reduced limit could be available from 1st October 2014 or not.

This brings an further unwelcome lack of certainty just when firms least want it.

If your firm has offer terms on the table for £2/£3m cover, but you would want to consider a lower LoI if one was to become available, it may be worth asking your broker to engage with the insurer to get an indication of whether they would be prepared to offer terms on a lower LoI if one were to authorised by the LSB, and if so, what sort of percentage saving it would make.  Our expectation is that, for the majority of firms, the likely saving will not justify the reduction.

Most insurers offer a relatively short 'window of opportunity' for the acceptance of quotations.  You may be able to get your broker to negotiate a slightly longer window, but for the moment, firms should assume that the existing limits of indemnity will remain in force for 2014/2015.

While it seems likely that the new requirement for firms to be able to demonstrate that they hold an 'appropriate' level of cover will also be delayed beyond 1st October, this is something that firms should be in a position to do in any case.  Whatever level of PII cover you currently hold, if you are considering increasing or decreasing your current level of cover, there are a number of issues you should take into account.

We can help you decide on the best course of action for you.  If you want to discuss any of the issues raised in this article, please contact your Lockton Broker or phone our solicitors helpline on 0845 0501 471.

We've created a quick straw poll to guage firms' views regarding their own Limit of Indemnity.  Please let us know your views, by answering our one-question anonymous poll.