The growing number of claims against conveyancing solicitors brought by lenders in recent years has highlighted the significance of the aggregation clauses which are increasingly being written into solicitors’ professional indemnity insurance policies.
In cases where one firm has mishandled a number of property transactions, an aggregation clause will allow the insurer to argue that they all amount to ‘one claim’ in accordance with the minimum conditions laid down by the Law Society. Once the sum total exceeds the policy limit, as in the case of the now-closed Willmett & Co, the professional indemnity insurer can refuse to indemnify the firm for all subsequent claims made in the period.
In an article posted recently on mortgagefinancegazette.com, the author argues that lenders should seek legal advice at the earliest opportunity. Acting quickly can help to ensure that a claim is settled before the aggregated limit of the solicitor’s professional indemnity insurance policy is reached.
