What is professional indemnity insurance? Professional indemnity insurance is a form of liability insurance. It provides a professional person or business with an indemnity against claims or losses arising out of negligent acts, errors or omissions connected to the insured professional practice. Professional indemnity insurance typically also extends to the acts, errors and omissions of past employees. Some professions, such as solicitors, accountants, architects, chartered surveyors, financial advisers and certain healthcare professionals are required to have professional indemnity insurance by law. However, professional indemnity insurance should be held by any individual or business that provides advice, designs or services in a professional capacity. Professional indemnity insurance is typically designed to cover claims for damages made by a client arising out of the ordinary course of the insured’s professional services. For detailed guidance on the professional indemnity insurance requirements for different types of professionals, see Practice Notes: • Professional indemnity insurance—solicitors • Professional indemnity insurance—architects • Professional indemnity insurance—accountants and auditors (ICAEW) • Professional indemnity insurance—surveyors and valuation professionals (RICS) • Professional indemnity insurance—FCA-regulated professionals (including

This Practice Note is intended for law firms regulated by the Solicitors Regulation Authority (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. 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. Requirement to have PII Law firms regulated by the SRA must have: • qualifying insurance with a participating insurer—see section: Qualifying insurance with a participating insurer, and • adequate and appropriate cover—see section: 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

ARCHIVED: This checklist has been archived and is not maintained. Name of insured Name Name of (potential) claimant Name Policy number Policy number Policy period Policy period Previous policies Previous policies Date of notification Date Is

This Practice Note sets out the professional indemnity insurance requirements for solicitors, including detailed guidance on the Solicitors Regulation Authority (SRA)’s Minimum Terms and Conditions of Professional Indemnity Insurance (MTC). Regulatory setting Who is the regulator? The SRA is the regulatory body for solicitors in England and Wales. It derives its powers from statute and makes rules including the SRA Accounts Rules, the Code of Conduct and the SRA Indemnity Insurance Rules. Is insurance compulsory for practice/membership? The SRA maintains its Indemnity Insurance Rules (IIRs) and Minimum Terms and Conditions of Professional Indemnity Insurance (MTC). The latest versions of both are in effect from 11 April 2025. Rule 2.1 of the IIRs requires that all SRA regulated firms have ‘qualifying insurance’ (meaning a policy that provides professional indemnity insurance cover in accordance with the MTC) provided by a ‘participating insurer’ (IIR, r 2.1). The minimum level of insurance is also dictated by the SRA under clause 2.1 of the MTC: • for limited companies and limited liability partnerships the minimum level of cover is £3m for

This Practice Note sets out the professional indemnity insurance (PII) requirements for surveyors and valuation professionals, including detailed guidance on the Royal Institute of Chartered Surveyors (RICS) Minimum Terms and Conditions (MTC). Regulatory setting Who is the regulator? RICS is the regulatory body for surveyors and valuers in the UK and Ireland. Is insurance compulsory for practice/membership? Under the RICS Rules of Conduct, all RICS-regulated firms must have ‘adequate and appropriate’ professional indemnity cover that meets the standards approved by RICS. What is the regulator’s rationale for having MTC? The RICS relies on three main reasons to justify its professional indemnity requirements. First, to ensure that if the firm faces a claim, it is protected from financial loss that it cannot meet from its own resources. Second, to protect the insured member or firm against the consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional activities. Third, to ensure that the firm’s clients do not suffer financial

Professional negligence describes a situation where a person exercising a professional skill (such as a solicitor, barrister, accountant, architect, engineer, financial adviser or medical practitioner) fails to perform to the standard of reasonable care and skill expected of a competent member of that profession, causing loss to a client or, in some cases, a third party. It is not generally defined in statute, but developed through case law as a species of negligence and, frequently, breach of contract. Core issues include: the existence and scope of a duty of care, the applicable standard of care (often informed by professional rules and expert evidence), breach, causation and remoteness of damage, and limitation periods. Across England & Wales, Scotland, Northern Ireland and Ireland, usage is broadly consistent, though terminology may differ (for example, “delict” in Scotland). Claims typically arise in professional indemnity litigation, regulatory investigations, and risk management for professional services firms. Professional negligence is central to assessing liability, insurance coverage, settlement strategy and the drafting and enforcement of engagement letters, exclusion clauses and limitation of liability provisions.

Dispute Resolution analysis: The Court of Appeal considered the correct approaches to actual knowledge and constructive knowledge in the context of solicitors’ professional negligence. Of note was the consideration of whether impecuniosity was a relevant factor in considering reasonable steps and the taking of expert advice for the purposes of the date of knowledge. Written by James Davies, barrister and Mediator at New Square Chambers.

Pensions analysis: The defendant pension consultants applied to strike out, alternatively for summary judgment on, parts of the professional negligence claim brought against them by the trustee and current employers of the Honda Group UK Pension Scheme (‘the Scheme’), arguing that those parts of the claim were time-barred and that the particulars of claim included new claims which went beyond the scope of the claim form (issued 12 years before particulars were served). Subject to certain exceptions, the High Court dismissed the application on both grounds. The decision helpfully analyses the difficult concept of a continuing breach of duty and well illustrates both the complexities involved in litigating a professional negligence claim decades after the breach complained of and the challenges such claims may present to parties seeking summary disposal. Written by Henry Day, barrister at Radcliffe Chambers.

Dispute Resolution analysis: 43 companies in liquidation brought professional negligence claims against their solicitors, Lupton Fawcett. The companies alleged that the firm had failed to advise them that the investment schemes operated by the companies were unauthorised collective investment schemes. The investment agreements were therefore unenforceable because the companies were not authorised persons. Accordingly, the investors were entitled to recover the sums invested. The sum claimed was £68m, made up as to sums received in cash and secured loans for the purposes of the investment. The solicitors’ firm applied for the claims to be struck out on the grounds that: (i) the companies had suffered no loss and/or there was no causal nexus; (ii) there was an absence of factual causation; and (iii) the ex turpi causa doctrine applied. There were also limitation issues in relation to some of the elements of the claims. The court held that the claims should be struck out because there was no loss, but that it would not otherwise have been struck out for the alternative reasons advanced. Written by Charles Joseph, barrister at Tanfield Chambers.

Mr Justice Akenhead has held that when there is a need to adduce expert evidence to support allegations of professional negligence, expert evidence need not be adduced at the stage of drafting the statement of case. The court will consider all the circumstances of the case when determining at what stage expert evidence should be made available.

This Practice Note sets out the basis for professional negligence claims by disappointed beneficiaries against the draftsperson who drew up the relevant Will. Professional negligence claims In broad terms, in order to succeed in a negligence action a claimant must show that the: • defendant owed a duty of care to the claimant • defendant breached their duty by an act or omission • loss for which the claimant seeks damages was caused by the act or omission, there is a sufficient nexus between the loss and the act or omission and the loss is not too remote • loss is not vitiated by another factor such as a failure to mitigate Any claim must also be brought within the relevant limitation period. For further details, see Checklist: Professional negligence claim—scope of duty, causation and remoteness and Practice Note: Bringing a professional negligence claim based on the duty in contract, tort and equity (available subject to subscription). The duty of care Historic position The historic position was that a beneficiary could have no cause of

This Checklist sets out the position under the Pre-Action Protocol for Professional Negligence claims (the 'Protocol') currently in force. For general guidance on the Protocol, see Practice Note: Professional negligence claims—the pre-action protocol. This Checklist should be read in conjunction with Practice Note: Professional negligence claims—pre-action protocol—claimant issues. For further detail on how to pursue a professional negligence claim (including with reference to a worked hypothetical set of pleadings), see Practice Notes: • Starting a professional negligence claim—a practical guide • Pleading professional negligence claims—worked hypothetical examples together with a template Precedent: Particulars of claim—professional negligence claim. Client’s initial instructions of potential professional negligence claim Limitation See Practice Note: Limitation—professional negligence claims. Is there a limitation issue pending? If so: • consider issuing protective proceedings, and/or • negotiating a standstill agreement See Practice Note: Professional negligence claims—the pre-action protocol—Limitation and the professional negligence PAP. Initial investigations As with any claim, there are various preliminary investigations that should be carried out, including: • background • basis of claim (in contract, tort etc) • any obvious difficulties with causation • preliminary