Solicitors professional indemnity insurance is the most heavily specified professional cover in the United Kingdom. The regulator sets minimum terms and conditions that every qualifying policy must meet, a minimum limit, and rules about what happens when a firm closes, and a policy outside them does not satisfy the obligation however good it looks.
Minimum terms and conditions
The regulator publishes the terms a qualifying policy must contain, covering the scope of cover, what may and may not be excluded, the minimum limit for different firm types, and the position of the insured after a claim. Firms buy to that specification from participating insurers rather than shopping a wording on the open market.
The renewal cycle
The profession has a common renewal pattern and a well developed broker market around it. Firms with claims histories, conveyancing heavy caseloads or particular practice areas find capacity tighter and pricing sharper, and leaving renewal late in a hard market is the recurring operational risk rather than the cover itself.
Run off when a firm closes
Closing firms must obtain run off cover for a period set by the rules, and the premium is substantial. It is the single largest planned cost of winding down a practice and is the reason succession planning and closure planning are treated as insurance questions as much as commercial ones.
Where the claims come from
Conveyancing has historically generated a large share, followed by litigation limitation failures, wills and probate errors, and undertakings given and not met. Insurers underwrite the caseload mix directly, which is why two firms of the same size can be quoted very differently.
Questions people ask about solicitors professional indemnity insurance
Is it compulsory for solicitors?
Yes. Firms must hold qualifying insurance meeting the regulator's minimum terms and conditions, at the minimum limit the rules set.
Can I buy any policy?
Only one meeting the minimum terms from a participating insurer. A cheaper wording that falls outside them does not satisfy the obligation.
What happens when a firm closes?
Run off cover is required for the period the rules set, and the premium is substantial. It is the largest planned cost of closing a practice.
Why is my quote higher than a similar firm's?
Caseload mix above all. Conveyancing, litigation and probate each carry different claims records and insurers underwrite the mix directly.