Solicitors EPP and Cessation Period — decision flowchart
When a SRA-regulated firm cannot secure PII renewal by 1 October, the SRA MTC provides two safety-net mechanisms: the Extended Policy Period (EPP) and the Cessation Period. Understanding what each is, how they work, and what triggers each is essential for firms facing renewal difficulty.
Extended Policy Period (EPP)
Definition. A 30-day extension of the previous year's PII cover, at pro-rata premium, that automatically applies when a firm fails to secure renewal on 1 October.
Purpose. Bridging period to allow firm to complete renewal arrangements without exposing clients to uninsured advice.
Trigger. Automatic on 1 October if no renewal binder in place. No firm action required to enter EPP.
Duration. 30 days from 1 October.
Cost. Pro-rata premium at previous year's rate.
Constraints. Firm cannot take on new instructions during EPP unless it can demonstrate the client's matter will complete within EPP or be transitioned to insured cover.
Cessation Period
Definition. A further 60-day period following EPP expiry, during which firm may not take new instructions and must be actively winding down or transferring the practice.
Purpose. Orderly closure or transition mechanism.
Trigger. Automatic on EPP expiry (30 October) if no renewal binder secured.
Duration. 60 days.
Constraints. No new client instructions. Must transfer ongoing matters to alternative firms. Must close matters that cannot be transferred.
The decision flowchart
- 1 October — renewal secured? If yes, continue normally. If no, automatic EPP entry.
- Days 1-15 EPP: aggressive marketing effort with specialist broker. Wholesale Lloyd's market. Fair-presentation pack refined.
- Days 15-30 EPP: if terms available, bind. If not, prepare for Cessation Period.
- Day 30 — Cessation Period entry. Stop new instructions. Notify clients of transition.
- Days 30-90: transition matters to alternative firms. Close what cannot transition.
- Day 90: firm ceases legal-practice status. Run-off cover from previous insurer covers post-cessation exposure.
What triggers EPP entry
- Insurer market withdrawal. All insurers previously willing to write your profile have exited.
- Claims-history escalation. Recent large claim making standard market unwilling to renew.
- Fair-presentation dispute. Insurer alleges non-disclosure and refuses to bind.
- Late preparation. Firm hasn't engaged broker in time; September starts too late.
- BSA-touching residential exposure change. New underwriting scrutiny post-BSA 2022 impact.