A consultation from the Bar Standards Board (BSB) has revealed that single-person entities could face problems when obtaining insurance on the open market.
The BSB, in a consultation that suggests the Bar Mutual Indemnity Fund’s (BMIF’s) monopoly should be extended to single-person entities, said that of 26 commercial insurers it approached, only eight would be willing in principle to insure BSB-regulated entities. There were also indications that commercial providers would be less interested in insuring smaller entities, with at least one of the eight suggesting that they would not be interested in sole traders, and another commenting that they would not be interested in insuring the smallest firms.
The consultation comes as the BSB waits to confirm the insurance provisions for the 17 new businesses it has authorised as ‘BSB-regulated entities’. Of the 17 entities authorised to date, 16 are single-person entities, while one is a partnership between two barristers. The BSB anticipates that the number of single-person entities applying for authorisation is likely to continue to grow faster than multi-person entities.
Under the current rules, BSB-regulated entities are able to insure themselves either on the open market or through the BMIF. The BSB has said that allowing single-person firms to do this could hurt the ‘sustainability’ of the BMIF if significant numbers of self-employed barristers seek to incorporate their practices and go to alternative providers.
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