Since its introduction in 2000, much of the debate surrounding the replacement of the Solicitors’ Indemnity Fund (SIF) with an open market for professional indemnity cover has focused on the level of premium that law firms have had to pay for their mandatory first £1m of cover.
Premiums plunged in the first year, only to rise sharply as the twin effects of Enron and declining capacity in the insurance market meant that many law firms have had to dig deeper to fund their obligations, even if the aggregate level of premium for the first layer of cover – £245m in 2002-03 – remains lower than the £258m taken by SIF during its last year of operation.
