Solicitors insurance

Your essential guide to cover that protects client trust

Solicitors insurance typically refers to professional indemnity insurance for SRA-regulated firms and practitioners. It is designed to protect against civil liability arising from professional services, such as negligence, errors, omissions, or breaches of duty. In practice, it safeguards both clients and firms by funding defence costs and valid damages where a mistake causes financial loss. For many practices, it is not optional - it is a regulatory requirement.

Rates have generally softened through 2024 into early 2025, with average primary layer rates reported around 4.25% of revenue and average premiums easing by roughly 5 to 7%. Increased insurer capacity and new market entrants have helped, supported by a stable claims environment. Even so, risk remains nuanced. Firms with high exposure to financial mis-selling or intensive AML work may still face higher premiums or tighter terms, and those nearing partner retirement without succession planning can encounter additional scrutiny.

From 2025, minimum SRA limits rise, with a higher baseline of protection required. This may lift premiums for some, but it improves client security and reduces the likelihood of underinsurance. Our goal in this guide is simple: explain how the cover works, show what drives pricing, and set out practical steps to compare policies safely. No jargon or hype - just clear context so you can choose confidently.

Insurance can only do its job when you know exactly what it covers - and what it does not.

What is covered in practice - and where limits apply

Professional indemnity insurance typically covers civil liability claims connected to legal services. That includes negligence, breach of professional duty, or unintentional misstatements. Defence costs are usually covered in addition to damages, subject to policy wording. Dishonesty by employees can be covered, provided the firm did not condone it. Third-party loss of documents and certain intellectual property disputes arising from advice may also be in scope. Policies usually extend to past and present partners, employees, consultants, and predecessors.

Exclusions are equally important. Fines and penalties are commonly excluded. Pure trading debts, director duties unrelated to legal services, and known or expected claims that pre-date inception are generally not covered. Claims arising from deliberate acts or fraud by principals are typically excluded. Work outside declared practice areas or jurisdictions may sit outside scope if not disclosed to insurers.

Claims usually follow a clear pattern. A client alleges loss linked to your advice, the firm notifies the insurer promptly, and the insurer manages defence or settlement according to policy terms. Timely notification is critical - late reporting can complicate coverage. For example, a conveyancing oversight that leads to a title defect might be covered, subject to limits and excess. By contrast, systemic failures in AML procedures could face closer underwriting scrutiny and may be priced higher or subject to conditions.

Transparency on how you work - from file checking to conflict controls - helps align expectations and supports smoother claims handling.

Who genuinely benefits from this cover

This insurance is essential for SRA-regulated practices across England and Wales, from sole practitioners to large international firms. It is particularly valuable for firms undertaking conveyancing, corporate and commercial work, private client matters, litigation, and advisory services where financial outcomes hinge on legal accuracy. Practices handling client funds or complex transactions gain additional protection through defence costs and clear claims handling protocols.

In-house legal teams generally fall outside this specific market, as their employers often provide alternative protections. Non-practising solicitors or those not offering services to the public may need different arrangements. If your work presents minimal risk of financial loss to clients, comprehensive PII at high limits may be unnecessary, though regulatory requirements still apply if you are practising. The safest approach is to map your services and client exposures against the minimum terms and typical market wordings.

Choosing a cover level that fits your risk profile

1. Basic - Meets minimum SRA terms

   • Who it suits: Smaller firms with straightforward work and lower fee income.
   • What it includes: Core civil liability cover, defence costs, minimum SRA limits, run-off provisions per SRA terms.
   • Key trade-offs: Higher excesses may apply. Limited flexibility on endorsements. Fewer extensions.

2. Standard - Higher limits with tailored endorsements

   • Who it suits: Growing firms or those with mixed practice areas, including property, commercial, and private client.
   • What it includes: Limits above the minimum, wider territorial cover, more generous loss of documents and mitigation costs.
   • Key trade-offs: Higher premium than basic, more underwriting questions, and potential conditions for higher-risk work.

3. Enhanced - Premium limits and broader protections

   • Who it suits: Larger firms or those handling complex, high-value matters and cross-border work.
   • What it includes: Significantly higher limits, excess layer options, bespoke wording, higher sub-limits, and enhanced claims support.
   • Key trade-offs: Materially higher premium and more rigorous risk management scrutiny.

4. Optional add-ons and related protections

   • Cyber insurance: Rates fell on average in early 2025, but risks remain. Helps with data breach, ransomware, and regulatory response.
   • Management liability: Protects partners and directors against allegations relating to management decisions.
   • Crime and fidelity: Addresses theft by employees or third parties where not fully covered under PII.
   • Extended run-off: Useful for mergers, closures, or retirement scenarios that exceed standard run-off terms.

Start with regulatory minimums, then scale limits to real exposure - transaction sizes, matter complexity, and client profile.

What it costs and why prices change

Prices are indicative only - individual quotes vary by insurer appetite and underwriting.

Who is eligible and what insurers look for

Eligible applicants include SRA-regulated firms and practising solicitors in England and Wales. Insurers will request proposal forms, practice area splits, fee income by category and year, details of high-value matters, claims history with narratives, risk management procedures, supervision frameworks, and information on any disciplinary or regulatory issues. Where mergers, acquisitions, or closures are planned, details of run-off needs and successor practice responsibilities are relevant.

Common reasons for decline or restrictive terms include significant involvement in financial mis-selling claims, weak AML controls, adverse claims experience, undisclosed disciplinary actions, or insufficient supervision. Firms nearing partner retirement without a succession plan may face additional underwriting conditions. Being open about controls, audits, training, and technology safeguards helps underwriters price fairly and align wording with actual practice risk.

From quote to claim - a simple path

1. Gather fee data, practice splits, and claims histories for three to five years.
2. Map current limits against matter values and client expectations.
3. Request quotes from multiple insurers while the market is softening.
4. Disclose risks transparently, including AML controls and supervision.
5. Compare terms - limits, excesses, exclusions, and any conditions.
6. Bind cover once wording and endorsements match your risk profile.
7. Maintain audit trails, training, and file checks throughout the year.
8. If an issue arises, notify promptly with documents and chronology.

Weighing the benefits and the trade-offs

Key checks before you commit

Review the policy schedule for limits, sub-limits, excesses, and any endorsements that restrict certain activities. Confirm retroactive dates align with your trading history so past work is included. Check exclusions for fines, penalties, and any practice areas not declared. Understand notification obligations and how quickly you must report circumstances. Ask how defence costs are treated - in addition to or within limits. Review run-off provisions, especially if merger, sale, or retirement is on the horizon. Be realistic about renewal pricing after the SRA limit increases, and keep accurate records to support any claims. Keep proposal forms and risk control evidence consistent across insurers.

Alternatives and complementary protections

1. Cyber insurance - For data breach, ransomware, and regulatory response where PII may not respond.
2. Management liability - Protects partners and directors for management-related claims not covered by PII.
3. Crime insurance - Addresses employee or third-party theft beyond PII provisions.
4. Public and employers’ liability - For injury or property damage claims unrelated to legal advice.
5. After the Event insurance - Client-focused cover for adverse costs in litigation matters.

Common questions answered

Q: Do I have to buy this insurance to practise? A: If you are an SRA-regulated firm or practising solicitor offering services to the public in England and Wales, professional indemnity insurance that meets SRA minimum terms is mandatory.

Q: How much cover do I need beyond the minimum? A: Consider typical transaction values, client profiles, and worst-case scenarios. Many firms buy limits above the minimum to reflect potential exposure and contractual requirements from institutional clients.

Q: Why are some firms paying more despite falling rates? A: Higher-risk practice mixes, previous claims, weak controls, or succession concerns can increase premiums even in a soft market. Transparent disclosure and improved controls can help.

Q: Will SRA limit increases make my policy more expensive? A: Higher minimum limits can lift premiums, but market competition may offset some of the increase. Budget early and assess whether excess layers provide cost-effective protection.

Q: Are cyber incidents covered by PII? A: PII can respond if professional services lead to a client’s loss, but it is not a substitute for cyber insurance. Dedicated cyber policies address data breaches, ransomware, and regulatory costs.

Q: What happens if I discover a potential issue but no claim yet? A: Notify your insurer as a circumstance without delay, following the policy wording. Early notification protects coverage and supports better outcomes.

Q: How are premiums calculated for start-ups or new firms? A: Underwriters look at partner experience, projected fees, practice split, controls, and any predecessor practice history. Expect closer scrutiny until a track record is established.

What to do next

Take stock of your practice mix, matter values, and client expectations, then compare quotes while capacity is high and rates are softening. Read wordings carefully, align limits to risk, and confirm notification requirements. You remain in control - choose the policy that clearly fits your firm’s real exposures and regulatory obligations.

Important note

This guide is general information, not personal financial advice. Policy terms vary by insurer. Always review the full wording, endorsements, limits, excesses, and exclusions, and seek professional advice if you are unsure.