Bond cover for Northern Ireland insolvency cases is being strengthened next month. From 9 December 2025, new regulations made by the Department for the Economy on 12 November update how practitioners’ bonds work and widen what can be claimed when fraud or dishonesty causes loss.

For readers who don’t live in the legal weeds: every appointment an insolvency practitioner takes must be backed by a bond. Each case has a specific penalty sum sized to the estate, and there is a separate back‑stop called the general penalty sum. The general penalty sum is now set at £750,000 and will step in if a case has no specific cover or if that cover runs short.

Interest is now payable on proven losses, calculated “at a rate above the Sterling Overnight Index Average”, and it runs from the date the loss occurred until the day the claim is paid. In plain terms, creditors shouldn’t lose out while a surety processes a valid claim.

The claim window is also clearer. There must be at least a two‑year period after the practitioner is released or discharged in the case during which a claim can be made under the bond. If the practitioner later held a further role in the same case, the clock starts from release in that later role, reducing the risk of a gap for complex administrations.

Another practical change is the new minimum “SPS indemnity period”. Where a bond limits liability by time, it cannot be shorter than six years from the date of appointment, and it must be capable of being extended with the surety’s consent. The surety can set reasonable conditions and seek an extra premium, but consent must not be unreasonably withheld.

Sureties also face a new duty to warn when a specific penalty sum is due to expire. They must give at least 60 days’ notice to the practitioner and the authorising body, saying whether they’re willing to extend or renew and on what terms. Until that notice is properly given, the specific penalty sum continues in force. That’s designed to stop accidental lapses.

For successors who have to pick up a tainted file, the bond must now cover reasonable costs. That includes the cost of investigating suspected fraud or dishonesty, making the claim and supplying evidence, taking expert advice such as legal opinions, and re‑doing essential estate administration where work has to be repeated after a replacement appointment. It’s a practical list aimed at getting cases moving again without punishing creditors twice.

Transitional arrangements run from 9 December 2025 to 31 December 2026. During that period the Department can approve bond forms that comply with either the pre‑December 2025 rules or the amended ones. Broadly, the new requirements do not bite on bonds issued before 1 January 2027 where the appointment was also before that date, including where the practitioner later holds another role in the same case.

These changes update the 2006 framework that first set the structure for specific and general penalty sums in Northern Ireland; at that time the general penalty sum was £250,000. Great Britain introduced equivalent reforms on 1 December 2024, lifting the general penalty sum to £750,000, adding SONIA‑linked interest, a two‑year claim window and a six‑year minimum time‑limit on specific cover. Northern Ireland’s move brings its bonding rules into line, giving suppliers and lenders dealing with NI cases a similar safety net.

For Northern firms that trade into Northern Ireland-or operate NI subsidiaries-this matters. If a practitioner’s dishonesty causes loss, there is clearer cover and interest builds while the claim is resolved. It lands in a year when the Department has also been reshaping oversight of the profession, including approving requests to step back from recognised‑body status by Chartered Accountants Ireland in February and the Law Society of Northern Ireland this month, moves that reduced duplication and tidied up supervision routes.

What to do now? Practitioners should speak to sureties about the new terms, check their diarised expiry dates against the 60‑day notice rule, and consider whether to extend time‑limited specific cover on higher‑risk files. Creditors and SMEs should ask office‑holders to confirm the specific penalty sum and the indemnity period on their case, keep good records if they suspect misconduct, and note that valid claims now accrue interest until paid. The aim is simple: fewer gaps, clearer rights and better protection when things go wrong.