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Your contact for Solicitors Professional Indemnity

Brian Boehmer, Partner, UK Professions
Brian Boehmer

The quality of your Solicitors Professional Indemnity Insurance underpins your reputation and integrity with your clients.  As a regulatory requirement, it's critical that it performs for you and your practice. As one of the few brokers with a specialist team dedicated to solicitors' PII it's perhaps no surprise that Lockton account for 30% of the insurance premium placed with the top 10 rated insurers.

Why choose us?

Competitive quotes from across the market

  • We access one of the widest range of insurer markets, including exclusive access to 3 A-rated insurers
  • Placing £100m in solicitors' PII premium across the market, we can negotiate harder on your behalf to secure the best long-term premium
  • We arrange cover for firms of all sizes, from sole practitioners to magic circle firms.

Simpler renewal process for you

  • Our online prepopulated proposal form ensures that your renewal process is as smooth and efficient as possible.

Our Service sets us apart

  • We offer independent advice on the best deal for you
  • We are specialists who understand your business.  Our dedicated Solicitors' Team is one of the largest in the country and works year round on servicing our solicitor clients' needs.
  • We provide you with a dedicated Account Manager who will be your first point of contact
  • We offer claims advocacy, risk management consultancy, and ongoing advice, training and support (including our suite of on-line resources) all year round

Reputation

  • Lockton has an enviable 97% client retention rate. 
  • Most of our new business comes from referrals and recommendations
  • We only deal with reputable A-rated insurers. The service you receive, and your reputation, matters.

You can download our PII proposal form by downloading it from the right hand side of this page. Once filled in, you can submit it to our team with the click of a button when you're finished.

Solicitors Professional Indemnity FAQs

What contributes to the cost of Solicitors Professional Indemnity Insurance?

Do the fees for my law firm have an impact?

Yes, the turnover for a law firm is one of the two key rating points for an underwriter when calculating the premium to charge for a solicitors professional indemnity insurance policy. Underwriters will tend to charge a premium as a percentage of a law firms last completed revenue, should fees increase or decrease at future renewals, this may result in a premium reduction, but not a reduction by way of percentage against the law firm's revenue.

What about the work that I undertake?

Yes, the work undertaken by a law firm is the second of the two key rating points for an underwriter when calculating the premium to charge for a solicitors professional indemnity insurance policy. Underwriters will consider what work a law firm undertakes, and for each area of practice they will place a level of risk for the respective work. For instance, commercial and residential conveyancing tend to consistently score highest on a solicitors professional indemnity insurance risk matrix for an underwriter.

Will a paid claim adversely impact the premium?

The impact on the cost of solicitors professional indemnity insurance will depend primarily on the cost of the claim relative to the premium, the greater the proportion the more likely the claim will serve as a catalyst for an increase in the cost of solicitors professional indemnity insurance. Secondly, a professional indemnity insurer will also consider the nature of the claim, whether the issue is a systemic one, and whether adequate risk management measures were in place prior to the claim. The more positive the professional indemnity insurers view is, the less adverse the impact on future costing for the law firm will be.  

Do I need to use an insurance broker to buy Solicitors Professional Indemnity Insurance (PII)?

To access the majority of solicitors professional indemnity insurers, law firms will need to go via an insurance broker.  Insurance brokers are authorised and regulated by the Financial Conduct Authority and carry their own professional indemnity cover.

Different insurance brokers offer different levels of service.  A transactional insurance broker will only place solicitors professional indemnity policies with insurers, whereas an advisory insurance broker goes further and offers independent professional advice and guidance.  

When choosing an insurance broker, there are three important questions:

  • Are they a specialist in the Solicitors' Professional Indemnity Insurance market (PII)?
  • How many years' experience does the insurance broker and its employees have in placing Solicitors' PII?
  • Which solicitors professional indemnity insurers can they access directly?  

How much do law firms pay for Solicitors Professional Indemnity Insurance (PII)?

The cost of a Solicitors PII policy varies from law firm to law firm, as it is determined by the unique risk factors of each practice.  

There are five key areas that influence the premium level:

  • Areas of work undertaken by the law firm
  • Level of gross fee income of the law firm
  • Claims history of the law firm 
  • Risk management within the law firm
  • Structure and location of the law firm 

Has The Law Society provided Solicitors Professional Indemnity Insurance (PII) to law firms in the past?

Between 1987 and the year 2000, The Law Society provided compulsory professional indemnity cover to all law firms in England and Wales.  This was via a mutual known as SIF (Solicitors Indemnity Fund) which was managed by the Solicitors Indemnity Fund Limited (SIFL).  From 1st September 2000, law firms opted to move towards an open market scheme, giving law firms choice and encouraging competition between solicitors professional indemnity insurers.

Since 2000, SIF has remained liable for providing expired run-off cover, also known as post six-year run-off cover (PSYROC), to law firms whose 6 year run-off policy has elapsed.  How long this arrangement will stay in place for is uncertain, however following a recent consultation by the solicitors regulator the SRA, it will stay in force until at least September 2023 to allow full consideration of the points raised in the consultation feedback.

Do all lawyers need solicitors professional indemnity insurance?

All law firms in England and Wales are authorised and regulated by Solicitors Regulatory Authority (SRA). It is mandatory for all law firms to purchase solicitors professional indemnity insurance to ensure their clients are adequately protected from civil liability claims.

Common practice is to use an insurance broker as they have access to multiple solicitors professional indemnity insurers and can give specialist insight into obtaining solicitors PII. Each Insurer will have their own law firm requirements, with some preferring to insure sole practitioners and others targeting top 200 law firms.
 

What does solicitors professional indemnity insurance cover you for legally?

Solicitors professional indemnity insurance covers claims made against law firms in respect of financial loss which occurs due to the negligence, error, or omission in professional advice or legal services provided by your business. As trusted advisors to law firms we encourage a continual focus on internal risk management processes and procedures.

Your Solicitors PII policy is there to protect and defend you from spurious claims, too. 

What level of Solicitors PI Cover do I need?

The mandatory and minimum professional indemnity cover limit for law firms is either £2million or £3million. The intended status of your law firm will determine whether you require a minimum of £2 million or £3 million limit of indemnity cover. A £2 million limit is required for all Sole Practitioners and Partnerships, whereas for all Limited and LLP entities the limit is £3 million. It is common for law firms to purchase Limits of Indemnity above the SRA's MTC.

How much does PI cost?

Solicitors professional indemnity insurance is a complex insurance product given its long tail liability nature, the cost of professional indemnity insurance will vary quite significantly from law firm to law firm. There are multiple factors that may impact upon the cost of this insurance but in very simplistic terms the two biggest drivers that influence the cost will be your activity profile and your fee income. Effectively, what work you do and how much of this work is undertaken. 
 

Which practice areas are considered high risk and what are low risk?

There are no practice areas in Solicitors PII that are immune from claims activity, but certain areas of practice are considered lower risk, some in terms of severity – meaning the value of claims could be less and some due to the frequency, meaning that notifications are less frequent. There are areas of practice that are both lower in frequency and severity of claims these will be considered the lowest risk. 

Whilst some insurers will apply the same rate into each banding other insurers will have a rating for each specific area of practice. Each Insurer will assess areas of practice or work types differently, some Insurers will see certain work-types as low frequency, but a high severity of loss, whereas others may put this in a risk banding of higher frequency and severity.

You can download our guide to learn more on how and what insurers take into consideration when insuring your business. 

Case Studies

Case study: assisting our client in the conduct of a lender claim

Our client, a top 50 UK law firm, acted for a very well known businessman in the purchase of various commercial properties.  The purchase agreements were extremely complex and required various short term loans.  Aspects of the loan agreements were backed by solicitor's undertakings.  Regrettably, the underlying client failed to put our client in funds in time for it to satisfy the undertakings it had given.  The Lenders then pursued a claim against our client.

A claim was presented to our client's PI Insurers, who tried to refuse indemnity by claiming that the undertakings were not given in the course of our client's legal practice.  We argued against the Insurers and their lawyers that this was not the case and assisted the client in properly formulating the supporting information and documents to prove that the undertakings were indeed given in the course of the client's legal practice.

The Insurers eventually conceded that two of the three undertakings were in fact given in the course of our client's practice and we ensured that our client was in receipt of the settlement funds within five days.  In addition, we negotiated that our client should maintain complete control of the recovery proceedings so that they could maintain the confidentiality of the transactions as well as contain any professional embarrassment that might have ensued.  The final part of our negotiations was to ensure that any recovery would be in favour of our client in the first instance.