Costs lawyers professional indemnity insurance — CLSB requirement and the UK market

Costs lawyers are authorised by the Costs Lawyer Standards Board under the Legal Services Act 2007. Their PI obligation, claims profile and market placement path differ from solicitors. This reference sets out the position.

The regulatory position

The Costs Lawyer Standards Board (CLSB) is the approved regulator of costs lawyers in England and Wales, established under section 27 of the Legal Services Act 2007. All practising costs lawyers must be authorised by the CLSB and meet its continuing professional development, code of conduct and — for those in private practice — professional indemnity insurance requirements.

The CLSB's PI insurance requirement applies to costs lawyers practising on their own account or as an employer of costs lawyers. The minimum limit of indemnity is currently £100,000 per claim, on a "any one claim" basis. Cover must respond to civil liability arising from the practice of costs law.

Costs lawyers employed within SRA-regulated firms will normally be covered under the firm's SRA MTC policy provided the definition of "professional services" in the policy includes costs-law work — which is standard.

Where CLSB PI differs from SRA PI

Three notable differences:

• Lower minimum limit. £100,000 versus £2,000,000 (SRA MTC minimum for firms). This reflects the more limited quantum of typical costs-law claims.
• No prescribed insurer list. The CLSB does not run a "qualifying insurer" market as the SRA does. Any FCA-authorised UK insurer can write CLSB-compliant PI.
• Different aggregation posture. Costs claims aggregate around the underlying litigation more naturally than solicitors' claims. Aggregation wording matters.

Claims patterns for costs lawyers

Costs claims typically arise from:

• Missed deadlines — most commonly a failure to file a bill of costs within a court-imposed time limit, or missing the deadline for a points-of-dispute reply.
• Under-recovered costs where the drafting or advocacy at detailed assessment produces a materially lower recovery than the client could reasonably have expected.
• Solicitors' Regulation Authority notifications where the retention or costs conduct of the costs lawyer touches on regulatory territory.
• Third-party costs orders under section 51 of the Senior Courts Act 1981 where the costs conduct is imputed to the costs lawyer as agent of the paying party.

Quantum is typically modest and often below the £100,000 minimum. Higher limits (£250,000 to £1m) are appropriate for costs lawyers with substantial commercial-litigation workflow or ATE-related activity.

Run-off cover

CLSB rules require that a costs lawyer ceasing to practise on their own account maintains adequate run-off cover for at least six years. This aligns with the primary limitation period for contract and tort claims under sections 5 and 2 of the Limitation Act 1980. See our limitation-periods reference for the potential extensions under s.14A and the s.14B fifteen-year long-stop.

Placement in practice

The CLSB PI market is thin — probably no more than three or four UK insurers write it regularly as a standalone product. A specialist broker familiar with legal-services PI will approach these directly rather than routing the risk through the mainstream SRA-MTC market. Premiums are generally modest, reflecting the low claims quantum.

For costs lawyers working within SRA firms, no separate placement is normally needed — a note to the firm's PI insurer at renewal confirming the costs-law activity is sufficient.

Related Apex references

• Solicitors PI Insurance UK Guide 2026 — the pillar
• Limitation periods in professional negligence
• Aggregation clauses by regulator