RUNNING LATE FOR YOUR PII RENEWAL? GET A FREE QUOTE NOW
RUNNING LATE FOR YOUR PII RENEWAL? GET A FREE QUOTE NOW
RUNNING LATE FOR YOUR PII RENEWAL? GET A FREE QUOTE NOW
RUNNING LATE FOR YOUR PII RENEWAL? GET A FREE QUOTE NOW
Professional indemnity insurance (PI insurance) is a type of coverage that protects businesses and professionals who provide services or advice. It helps cover costs if a client claims they lost money because of mistakes, negligence, or poor service. This includes paying for legal fees and any compensation owed to the client. Professional Indemnity (PI) Insurance is designed to cover the costs of compensating clients who suffer financial loss due to mistakes, errors, or inadequate advice provided by you.
Imagine it as a protective shield that ensures you are covered if something goes wrong, helping you navigate the complexities of the professional world with confidence. We’re here to help you understand professional indemnity insurance and stay on top of your legal requirements with expert advice and helpful resources.
Occupations requiring professional indemnity insurance can be streamlined into three core categories:
The professional indemnity market for solicitors can also be a minefield and in recent years hundreds of law firms have been closed down by the SRA because they were unable to obtain cover. So it’s important to have some understanding of how the market works to be able to make an informed decision on which product is best for your firm. Please take some time to read this guide and call us if you require more information at 0800 180 4203.
We believe that in 2025, the market is in great shape to deliver some very competitive rates to the profession. This is primarily due to the scrapping of the assigned risks pool and the common renewal date, which has made the market more attractive to Insurers.
In revenue terms, a solicitor's professional indemnity is worth £ 250 million in annual premiums to the insurance market. This is for the ‘primary’ insurance cover, and a further £ 50 million comes from the excess layer or ‘top-up’ cover. This is generated by the 11,000 law firms practicing in England and Wales. Until quite recently, all law firms renewed their PII on the same day each year, the 1st of October. However, this was a chaotic system, and the common renewal date idea was finally abandoned in 2014.
Now, law firms are free to arrange and renew their cover at any time during the year. That said, around 90 % of law firms still renew their professional indemnity insurance on 1 October each year, and it will probably take years for this date to unravel itself from the renewal process. In England and Wales, you can only buy professional indemnity insurance for solicitors from an insurer who has signed up to the SRA’s Qualifying Insurers Agreement.
There are approximately 20 “Qualifying Insurers” signed up to underwrite solicitors’ professional indemnity insurance, but there is some churn each year with some insurers withdrawing and some new entrants. Market distribution is heavily dominated by brokers who arrange PII on behalf of almost all law firms, with only a small number of firms arranging cover directly with insurers. Like any market, you’ll find the good, bad, and ugly, so if you want some good advice about which insurers are best suited for your firm, please contact us anytime.
Professional Indemnity Insurance is your safeguard against the financial fallout from claims related to your professional services.
Here’s a detailed look at what it covers:
Over 90% of law firms buy their cover through insurance brokers, so brokers dominate market distribution. A good broker’s market knowledge lowers premium spend as well as provides valuable advice and support throughout the insurance period, especially on claims. For a quotation or free advice, call us on 0800 180 4203.
Navigating solicitors' professional indemnity insurance involves understanding various factors. Typically ranging between 2% and 5% of fee income, rates depend on risk factors and market competition. However, rates may vary based on the nature of work, claims history, and more. New start firms enjoy discounted rates due to the absence of a historical track record.
Be mindful of minimum premiums, as insurers set different starting points. Minimum premiums, such as £1,000 or £5,000, vary among insurers. Ceasing operations requires SRA-mandated run-off insurance, usually calculated at three times the annual premium for six years of coverage. Avoid treating professional indemnity insurance as a mere commodity; it's commercial insurance with potential coverage disputes. Given market volatility, leverage the expertise of a specialist broker for sound advice.
When seeking approval from the Solicitors Regulation Authority (SRA),new firms must submit a quote or 'offer of professional indemnity insurance' from an SRA-authorized provider. This quote must adhere to the Minimum Terms and Conditions (MTC) outlined in the SRA Indemnity Insurance Rules. To facilitate the quotation process, the following documents are essential:
New firms must be aware of the mandatory 'run-off' requirement for professional indemnity insurance if they decide to cease practice in the future. Ensure compliance and secure your firm's success with the right coverage.
To obtain a quotation, you have to complete a fairly lengthy proposal form, which will be reviewed by an experienced underwriter. Remember that the proposal form is a representation of the quality of your business to the insurance market, so it’s worth spending some time making sure it looks professional. An underwriter will be using it to judge you, and they will also look at your website and perhaps your financial information.
If you spend time and money on risk management and improving quality, make sure your insurer knows about it. This could easily be overlooked and not reflected in your premium so add some notes on this subject.
The rating of a law firm or any professional indemnity risk is a complex process. Underwriters need to be highly skilled and require a significant amount of information to enable them to provide a quotation that accurately reflects the risk they are pricing. Premiums are calculated based on many factors, which include:
To assess the risk, the underwriter will require a fully completed proposal form, which they will consider in detail. They will also look at the firm's website, or they may even look deeper online into a firm's background. Presentation is more important than you might think. The underwriter is assessing the professionalism and quality of your firm and if the information is badly presented, it may influence their judgment and the premium they offer or they may even decline to quote.
All work carries some risk, and for the legal profession, this can vary considerably. The following is by no means an exhaustive list, but it will give you some idea of the type of legal work where professional indemnity claims come from. Low risk-Adjudication, Agency, Children Work, Criminal, Expert Witness, Immigration, Officers, and Appointments.
Medium Risk– Defendant Litigation, Employment, Matrimonial, Personal Injury, Town Planning. High Risk– Commercial Litigation, Estate Agency, Financial Advice, Intellectual Property, Probate, Trusts and Wills, Tax Planning. Very High Risk- Commercial work (public and non-public companies),Conveyancing.
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All qualifying insurers must provide a policy wording that is no less comprehensive than the minimum terms set by the SRA. The policy wording provided under the SRA's ‘minimum terms’ is a ‘civil liability’ wording and is widely regarded as the Rolls-Royce of professional indemnity insurance. The cover is broad, and the small print generally favors the policyholder rather than the insurance company.
The policy will have the usual exclusions you’d expect to see in a professional indemnity policy. This could include;
The insurance company may be able to seek recovery of its payments if a firm is found to have engaged in non-disclosure of relevant factors, misrepresentation, dishonesty, or fraud. Your insurance policy is a contract between you and your insurer. Like any contract, it is prudent to familiarise yourself with its wording. In particular, you should always read the policy exclusions.
Trading without adequate professional indemnity insurance is a terminal breach of regulatory requirements, and a firm will be prevented from trading and closed down if it cannot obtain cover. The availability of professional indemnity insurance for every law firm should not be taken for granted, as there are numerous examples of the SRA closing down firms that were unable to obtain coverage.
This system means that the PII market is deciding who can or can’t practice, so we cannot over-emphasize enough the importance of internal risk management to maintain a good risk profile. Evidence of a firm's cover is required every year by the SRA. For free advice or a professional indemnity insurance quotation, please contact us on 0800 180 4203 or email info@legalexplus.com
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This guidance note is intended for information purposes only. Whilst all care has been taken to ensure the accuracy of the guidance note, it is not to be regarded as a substitute for specific advice. This guidance note shall not be reproduced in any form without our prior permission. © 2025 Lex Insure Services Ltd
At Legal Ex Plus, we are dedicated to providing top-notch Professional Indemnity Insurance tailored to meet your specific needs. Here’s why we stand out:
Due to the complexity of the risk, online quotations are not yet available for law firms. Please call us for a quotation on 0800 180 4203.
The SRA specifies the minimum level of professional indemnity cover a firm must carry, depending on the structure of the firm.
Extra cover on top of the SRA’s minimum requirements can also be purchased if required. This is called an ‘excess layer’ or ‘top-up’, and the total amount of cover will depend on the size of the firm and its risk exposure.
If you are a solicitor in practice you are required to have professional indemnity insurance by the regulatory body of the country in which you practice. In England and Wales, the representative and regulatory functions are separated. The Law Society represents the profession, while the Solicitors Regulation Authority (SRA) is the regulatory body Solicitors are required to have professional indemnity insurance cover for the entire time they are practicing and need to show their regulator that they have professional indemnity insurance in place as part of the practicing certificate renewal process.
Whether you’re a sole practitioner or a large firm you can enjoy:
Choosing Professional Indemnity Insurance from Legal Ex Plus means securing comprehensive coverage that includes:
Solicitors Professional Indemnity Product Cover
Eligibility
All solicitors in England and Wales
A team of specialists will personally guide and support you any time you need to report a circumstance or claims.
Contact us today for a quote or find out more by calling 0800 180 4203.
Frequently asked questions about Solicitors' Professional Indemnity insurance:
1. Who benefits from professional indemnity insurance?
It is designed to protect professionals and their businesses against claims made by clients for losses or damages due to the professional service or advice provided.
2. What limit of indemnity do I need?
We recommend you check the Solicitors Regulation Authority requirements. It’s always good business practice to also review your contracts, both pending and current, to assess whether your limit is sufficient, taking into account if a claim is made in a number of years.
3. Will my policy cover my past work?
Yes. The PI policies we arrange provide cover retrospectively.
4. Why is professional indemnity important?
Professional Indemnity Insurance is important because if someone claims your advice was negligent and caused them financial loss, Professional Indemnity insurance can cover your legal defense costs, even if the claim is unfounded.
5. What is the difference between PI and PL insurance?
Public liability (PL) insurance protects against claims from the public for injury, illness, or property damage, while professional indemnity (PI) insurance covers client claims for professional errors or negligence.
6. Do I need professional indemnity insurance?
Whether you need professional indemnity insurance depends on your profession and the nature of your work. While not legally required in all cases, it's often a good idea, especially if you provide advice, services, or handle confidential information, as it protects you against potential financial losses from claims.
We offer a range of informative guides on Professional Indemnity Insurance, crafted by experts to help you understand your options. Our guides cover everything from choosing the right policy to understanding essential coverage components. All resources are available for free to help you make well-informed decisions. Need more information or personal assistance?
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Contact Legal Ex Plus today at 0800 180 4203 or email info@legalexplus.com.
Our team of experts is here to answer your questions and help you find the perfect Professional Indemnity Insurance for your needs.
Guide To Run Off Insurance
Guide To Professional Indemnity Insurance
Why You Need An Insurance Broker
The Insurance Act
Solicitors' Professional Indemnity Insurance
Your Limit of Indemnity
Your Insurance Policy Obligations
Your Duty of Disclosure
PI Insurance Market – Facts and Figures
Our Tips To Reduce Your Professional Indemnity Premium
Guide To Professional Indemnity Insurance Claims
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