FSCS steps in to protect Lemma customers

5th October 2012

The Financial Services Compensation Scheme (FSCS) is stepping in to help customers of Lemma Europe Insurance Company Ltd, which has failed.

The Scheme is working closely with the provisional liquidator in Gibraltar, Grant Thornton, to protect the firm’s UK customers after declaring it in default. Up to 7,000 UK policyholders may be affected by the collapse of the firm.

Lemma was an FSA authorised firm, so claims against the company may be protected by FSCS, which protects policyholders UK risks. The maximum level of compensation for claims against firms is 90% of the claim with no upper limit.  FSCS covers compulsory insurance (such as employer’s liability and motor third party risks) in full.

“FSCS is here to protect consumers when authorised financial services firms go bust and we are stepping into help UK customers of the firm. We are prioritising people who may have urgent claims and will be working with the provisional liquidator to ensure that emergencies can be dealt with. People facing potential hardship will be our top priority,” said Mark Neale, Chief Executive. “

Since 2001, FSCS has protected more than 4.5m people and paid out more than £26bn in compensation.  It is an independent body, set up by government which the financial service industry funds. We do not charge consumers for using our services.

FSCS will work with the provisional liquidators to ensure that outstanding claims are processed as quickly as possible.

Lemma sold a variety of policies which may qualify for FSCS protection. They include:

- General property

- Householders

- General public liability

- UK employers liability

- Fine art and jewellery

- Legal expenses

- Bloodstock

- Livestock

- UK solicitors' professional indemnity


FSCS protects individuals and small businesses.  If you are a small business with an annual turnover of less than £ 1m and purchased one of these policies we should also be able to help you. Where we can help protection will be at 90% of the value of the claim. In the case of employer’s liability insurance, FSCS protection is 100% of the claim for all policies.

In certain circumstances we are also able to assist with the loss of any premium you may have paid, but we recommend you check the position with Grant Thornton or that you take advice before making any decision to cancel your policy.

We will publish updates as more information becomes available.


- Notice by Lemma Europe Insurance Company Ltd

- Q&As about Lemma Europe Insurance Company Ltd

- FSCS compensation limits

Jargon Buster

  • Authorised firm

    a company, unincorporated body, partnership or individual permitted to carry out a regulated activity by the FCA or the PRA. This term includes a mutual (unincorporated) organisation, for example a friendly society.
  • FSA

    Financial Services Authority, was previously the UK's regulator for the finance industry. It was replaced by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) on 1 April 2013.
  • In default

    A firm unable, or likely to be unable to pay claims against it. This will generally be because it has stopped trading and has insufficient assets to meet claims, or is in insolvency.