Elite Insurance has announced that it is to withdraw from the solicitors professional indemnity market in the UK.
Among the reasons given was the increased likelihood of fraud in respect of solicitors' client accounts, particularly in conveyancing matters.
The fact that cyber fraud was specifically mentioned is interesting. There is no doubt that professionals, particularly those who hold client funds, are increasingly being targeted by internet con artists. However, the risk of cyber fraud is not something traditionally associated with professional indemnity insurance.
The Minimum Terms and Conditions of Professional Indemnity Insurance for Solicitors (which set out the minimum level of cover to be provided by a professional indemnity policy as agreed between participating insurers and the Law Society) provides that policies must cover claims associated with the provision of "Legal Services" , as defined. Whether being victim of a crime would fall under a policy of professional indemnity insurance at all is questionable.
Insurers have been concerned about the risks associated with data breaches and cyber crime for a while. Professionals should also be concerned and take steps to ensure that they have the appropriate risk management systems in place, as well as an adequate policy of cyber risk insurance.
This has come at a time when law firms face the danger of cyberfraud attacks, which has pushed up the minimum cover required on a policy.