21 May 2018

Regulator confirms minimum insurance terms for entities

24 March 2015

The Bar Standards Board (BSB) has today published the minimum terms of the professional indemnity insurance it expects BSB-regulated businesses ("entities") to have in place.

In detailed information provided on its website, the BSB has, amongst other things, confirmed that the minimum level of cover each entity is expected to have is £500,000 per claim. However, entities must also ensure they have adequate insurance for the type of work they are doing in order to protect their clients in the event of something going wrong.

With the first entity applications due to be authorised by the regulator from early next month, all prospective BSB-regulated entities are urged to contact their insurer as soon as possible so as to start the process of obtaining the appropriate cover.

The BSB has been accepting applications from those wishing to set up BSB-regulated entities since January. These will be businesses owned and managed by lawyers and which concentrate on activities such as representing clients in court proceedings, appearing as an advocate, and giving specialist advice.

Director of Supervision for the BSB, Oliver Hanmer, said: "With over 75 expressions of interest and 16 completed applications to date we are well and truly geared up to start regulating entities from next month. We expect that providing confirmation about the necessary insurance arrangements will encourage further interest. If anyone wants to find out more, I urge them to get in touch as soon as possible."

Today's announcement also confirms that entities will have a strictly enforced 21-day grace period from the date on which the BSB confirms their authorisation to provide the regulator with evidence that appropriate insurance is in place. As it could take time to arrange the insurance the regulator is advising prospective entities to apply simultaneously to an insurer and to the BSB for authorisation. An entity will not be able to practise until the insurance is in place.

Barristers who have professional indemnity insurance in place, covering their practice as a self-employed barrister, can continue to practise in this capacity whilst they are waiting for entity insurance cover.

Interested in setting up a BSB-regulated entity? Please get in touch via 0207 092 6801 or entityregulation@barstandardsboard.org.uk. For more information, please click here.

The BSB believes that becoming a regulator of entities will help encourage new business models to emerge and flourish, which will broaden client choice.

The BSB is not authorising Alternative Business Structures (ABSs) - entities with non-lawyer owners and managers - but later this year will apply separately to the Legal Services Board to widen its regulatory scope to become a licensing authority of ABSs.

ENDS

Notes to editors

About the Bar Standards Board
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