Professional indemnity insurance 2019—law firms

The following Practice Compliance practice note provides comprehensive and up to date legal information covering:

  • Professional indemnity insurance 2019—law firms
  • Requirement to have PII
  • Qualifying insurance with a participating insurer
  • Qualifying insurance
  • Participating insurer
  • Adequate and appropriate insurance
  • Assessment of PII required
  • Claims made insurance
  • Excluding or capping liability
  • Transparency
  • More...

Professional indemnity insurance 2019—law firms

Law firms are obliged to buy qualifying insurance on the SRA’s minimum terms. They must also ensure that their PII provides adequate and appropriate cover in respect of services the firm provides or has provided, taking into account any alternative arrangements the firm or its clients may make. This is known as the ‘adequate and appropriate insurance’ requirement.

This Practice Note is intended for law firms regulated by the SRA, including sole practices. It explains the requirements in the SRA Standards and Regulations relating to professional indemnity insurance (PII). This Practice Note is not intended for in-house lawyers or freelance solicitors.

Requirement to have PII

Law firms regulated by the SRA must have:

  1. qualifying insurance with a participating insurer—see below: Qualifying insurance with a participating insurer, and

  2. adequate and appropriate cover—see below: Adequate and appropriate insurance

The main PII obligations can be found in the SRA Indemnity Insurance Rules, which apply to law firms regulated by the SRA and their principals.

The principal of a law firm is shown in the table below.

Type of firmPrincipal
Recognised sole practiceSole practitioner
PartnershipEach partner
Company with a share capitalEach director of that company and any person who:
—is held out as a director
—beneficially owns the whole or any part of a share in the company
—is the ultimate beneficial owner of the whole or any

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