The SRA Minimum Terms are a floor, not a ceiling — and the most common mistake buying partners make is treating them as both.
If you run a firm regulated by the Solicitors Regulation Authority, your professional indemnity policy has to comply with the Minimum Terms and Conditions of Professional Indemnity Insurance (MTC). Every qualifying insurer in the solicitors’ PI market commits to this in advance, through a contractual arrangement with the SRA. This guide is the practical companion to our clause-by-clause walkthrough: what the MTC means for a buying partner, what it does not mandate (where the firm still has decisions to make), how the participating insurer regime actually works, and what happens when a participating insurer leaves the market or goes insolvent. The statutory anchor is the Solicitors Act 1974, which empowers the SRA to make indemnity rules; the current vehicle is the SRA Indemnity Insurance Rules and the MTC schedule appended to them.
For the partner sitting across the desk from the broker, the MTC does three things and leaves four big decisions open.
What the MTC fixes:
What the MTC does not mandate:
In other words, the MTC standardises the bottom of the policy and leaves the top open to broker-led negotiation. Firms that buy purely on premium often miss this — they get a compliant policy but not necessarily the best policy on offer.
A participating insurer is an insurer that has signed the SRA’s Participating Insurer’s Agreement. By signing, the insurer commits in advance — to the SRA, not just to the firm — that any policy it issues to a regulated firm will comply with the MTC. This matters because it creates a regulatory backstop: the SRA can take action against an insurer that backs out of obligations, even if the firm itself has no contractual leverage.
Run-off on cessation flows through the same regime. When a firm closes without a successor practice, the participating insurer that wrote the last policy is contractually required to provide 6 years of run-off cover on MTC terms. The premium is set by the insurer (typically front-loaded — a substantial multiple of the last annual premium in year 1, tapering thereafter) but the obligation to offer the cover is not optional.
Where this regime has historically broken down is insurer insolvency. Until the early 2000s, the Solicitors Indemnity Fund acted as a mutual — solicitors collectively self-insured. The market opened to commercial insurers from 2000 onwards. When a participating insurer subsequently became insolvent and could not honour run-off obligations, the SRA operated an Assigned Risks Pool to provide last-resort cover for firms unable to find a participating insurer, and the Solicitors Indemnity Fund continued in a residual role for legacy run-off claims. The Assigned Risks Pool was closed to new entrants in 2013. The Solicitors Indemnity Fund Limited (SIFL) has been retained as the current vehicle for post-6-year supplementary run-off cover, after a period of uncertainty about whether the role would continue at all. The position has been reviewed by the SRA more than once in recent years; firms approaching cessation should confirm the current SIFL arrangements with their broker rather than relying on summaries that may have aged.
Section 11 of the Insurance Act 2015 sits behind all of this — it prevents insurers from declining a claim for breach of a term that could not have increased the risk of the loss actually suffered. The MTC does not displace section 11; if anything it reinforces the protective posture.
A 6-partner regional firm with £3 million of fee income — predominantly residential conveyancing with some private client and family work — has historically bought the SRA minimum: £2 million primary, no top-up. A buying partner reviews the firm’s exposure and discovers that a single new-build site the firm is acting on has 60 plots, all conveyances handled by the same junior fee earner under partner supervision. The conveyancing fees on the site over an 18-month period are £180,000. The combined plot values are around £15 million.
Aggregation analysis suggests that any systemic error in the site title work could constitute “similar acts or omissions in a series of related matters or transactions” under clause 2.5 — one claim, one £2 million limit, against potential exposure of several million pounds. The firm buys an additional £3 million top-up layer at renewal for a modest premium (a fraction of one percent of the primary). Two years later the firm receives a claim from the site lender alleging defective title checks across 40 plots; the loss settles at £4.2 million. The primary responds to £2 million, the top-up responds to £2.2 million (after the primary erodes), defence costs are funded in addition to the primary limit, and the firm survives a claim that would have wiped out the partnership at minimum limits.
Start with the firm’s structure and the SRA’s current minimum: £2 million for unincorporated practices, £3 million for incorporated practices. Then layer on the firm’s actual exposure profile — work types, single-matter size, client concentration, lender panel obligations, any work that systemically clusters (development sites, leasehold portfolios, large commercial deals). Ask the broker to model an aggregated claim against your full tower under MTC clause 2.5. Ask whether the primary insurer’s wording goes above the MTC floor anywhere — wider innocent insured, broader run-off triggers, included mitigation costs — and at what premium difference. Confirm the participating insurer status of every insurer on the tower. Finally, ask the broker to put in writing what would happen on cessation: what the year 1 run-off premium is likely to be, and how the partnership intends to fund it.
Apex’s view: The MTC has done its job for 25 years — it has kept a baseline of cover in place across a market that would otherwise have shrunk badly through the hard cycles. But the MTC also lulls partners into a false sense of security. We see firms with £2 million primary, no top-up, and a book of residential conveyancing that exposes them to clustered claims worth multiples of the limit. The minimum is the minimum, not the recommendation. Treat the MTC as the start of the buying conversation, not the end of it.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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