Professional Indemnity Insurance for New Costs Lawyers — Your First Policy (2026)

Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05

1. Do you actually need PI as a new Costs Lawyer?

In a word: yes. There are two separate reasons, and it's worth understanding both because they don't always point at the same amount of cover.

The regulatory reason. Costs Lawyers in England and Wales are regulated by the Costs Lawyer Standards Board (CLSB), the independent regulator that oversees the profession. Under the CLSB's rules, holding adequate and appropriate professional indemnity insurance is a requirement for anyone practising as a Costs Lawyer. It sits alongside your practising certificate and your continuing obligations to the CLSB. Put simply, you cannot properly hold yourself out as a practising Costs Lawyer without it. If you are newly qualified, or newly setting up on your own after time in a firm, this is one of the first boxes you need to tick before you take on work in your own name.

The reason the regulator insists on it is straightforward. Costs law is technical, deadline-driven and money-sensitive. A missed deadline on a bill of costs, an error in a points of dispute or a mistake in a detailed assessment can have a direct financial consequence for the client you act for. PI insurance exists so that if you get something wrong, there is a means of putting the client back in the position they should have been in — rather than that liability falling on you personally.

The commercial reality. Even setting the regulator aside, the firms and solicitors who instruct Costs Lawyers will frequently ask to see evidence of PI cover before they send you work. Solicitors' practices, in-house legal teams and larger costs consultancies routinely require their suppliers to carry insurance, and some will specify a minimum limit in their terms of business. So your PI policy is not only a compliance item — it's a piece of commercial infrastructure that lets you win instructions in the first place.

For a first-timer the takeaway is simple: treat PI as one of the founding acts of your practice, on the same list as registering with the CLSB and opening a business bank account — not something to bolt on later.

2. When cover must start — and why day one matters

Your cover should be live from the moment you first accept a client engagement in your own name or your firm's name. Not the day you invoice, not the day the matter concludes — the day you take on the responsibility.

This trips people up because the work you do today may not surface as a problem for months or even years. A Costs Lawyer might draft a bill in the spring, have it assessed over the summer, and only receive a complaint the following year when the paying party or the client revisits the figures. If you weren't insured at the point the complaint is made, you can have a gap even though you were fully diligent at the time you did the work. We'll come back to exactly why in the section on claims-made cover — for now, the rule of thumb is: be insured before you touch your first file.

There is a practical upside to sorting this early. Getting your first policy in place gives you a schedule and a certificate you can show to instructing solicitors straight away, which removes a common objection before it's even raised. You can begin your quote in a few minutes and have the documentation to hand.

3. How much cover does a new practice need?

The amount of cover you buy is called your limit of indemnity — the maximum the insurer will pay out. Choosing it is the decision most first-time buyers agonise over, so let's make it manageable.

Common limits offered to smaller professional firms are structured in round tiers — for example £1m, £2m or £5m of cover. These are illustrative options rather than a recommendation; the right figure for you depends on your own circumstances. Three things tend to drive it:

• The size of the matters you handle. A Costs Lawyer who works on high-value commercial costs disputes, group litigation or substantial detailed assessments carries more potential exposure than one dealing mainly with modest fixed-costs and small bills. Your limit should reflect the largest realistic loss a single error could cause, not your average matter.
• Client-mandated minimums. This is the big one for new entrants. If an instructing solicitor's terms of business require you to carry, say, a minimum level of PI cover, then your limit is effectively set for you — you need to meet the highest requirement among the clients you want to act for. It's worth asking your prospective instructing firms what they expect before you fix your limit.
• Your own appetite for risk. Cover protects your personal and business assets. Buying a limit that only just covers your typical matter can leave you exposed on the one large instruction that goes wrong.

A sensible approach for a new practice is to start with the highest of (a) any client-mandated minimum and (b) a limit that comfortably covers your largest anticipated matter, then review it each year as your book grows. You are not locked in — limits can be increased at renewal as your work changes.

4. What a first policy costs — what underwriters actually look at

We won't quote a price here, because a genuine premium can only come from looking at your specific details — and anyone giving you a firm figure without them isn't being straight with you. What we can do is tell you exactly what an underwriter weighs up when pricing a new Costs Lawyer with no claims history.

• Your estimated turnover / fee income. For a start-up this is a forecast, not an audited figure, and that's completely normal. Underwriters understand that a new practice is projecting. Give a considered, honest estimate for your first year.
• The nature of your work. The mix of costs work you'll do — the types of assessment, the typical value of the bills, whether you advocate at hearings, whether you handle any adjacent services — shapes the risk profile.
• Your qualifications and experience. Being a CLSB-regulated Costs Lawyer is itself a positive signal — it tells the insurer you've met a recognised professional standard. Prior years of experience working within another firm before going solo also count in your favour.
• The limit of indemnity you choose. A higher limit means more cover and therefore a higher premium — one reason not to over-buy, but also not to under-buy against a client requirement.

Notice what's not on that list for a new firm: years of accounts, a claims record, a long file of past matters. Because you're starting fresh, there simply is no history to disclose — which usually makes your application shorter, not longer.

5. "Claims-made" — explained simply, and why continuity matters from the start

Almost all professional indemnity insurance is written on a claims-made basis. This one concept catches out more first-time buyers than any other, so it's worth a plain-English explanation.

A claims-made policy responds to claims that are first made against you while the policy is live — regardless of when you actually did the work. Contrast that with, say, your car insurance, which covers an accident on the day it happens. With PI, what matters is the date the complaint lands on your desk, not the date you drafted the bill.

Here's why that matters for you as a new practice. Suppose you do a piece of costs work in your first year, and everything seems fine. Two years later the client raises a problem with it. You'll be covered only if you had a live PI policy at the time the claim was made — and, importantly, if that policy's retroactive date reaches back to cover the original work. This is why keeping your insurance continuous, year after year, is so important. Let cover lapse for even a short window and a claim arriving in that gap may not be covered at all.

Two practical consequences for a first-timer:

• Start clean and stay continuous. Because you're buying your first-ever policy, your retroactive date will typically be the start of this cover — there's no earlier work to reach back to. That's fine. What you must avoid is any future gap in cover.
• Think ahead to when you stop. If you ever wind down or retire, claims can still arrive after you've stopped practising. That's what run-off cover is for — a continuation of protection for past work once you're no longer trading. You don't need to buy it now, but it's worth knowing the concept exists so it isn't a surprise years down the line.

6. How to buy your first policy — what you'll need to hand

The good news for new firms is that the application is short. Here's what to have ready:

• Your name and trading name, and your practice structure (sole practitioner, partnership or limited company).
• Confirmation of your CLSB regulated status.
• An honest estimate of your first-year fee income.
• A description of the costs work you intend to do and, roughly, the value and type of matters.
• The limit of indemnity you want — informed by any client requirements, as above.
• Any relevant prior experience or qualifications you'd like the insurer to know about.

That's genuinely most of it. Where an established firm would be sending years of accounts and a claims history, you can simply confirm you're a new practice. A broker like Apex then takes those details to insurers, finds cover that fits and explains the schedule to you in plain terms before you commit. You can get the process moving in minutes.

One point worth stressing throughout: your duty of fair presentation. When you apply for commercial insurance you must present the risk fairly and not misrepresent it. In practice this just means answering the questions honestly and disclosing anything material you'd reasonably expect an insurer to want to know. Get that right at the outset and your cover will do what it's meant to when you need it.

7. Common first-timer mistakes to avoid

• Leaving it too late. Taking on a first instruction before cover is live creates an uninsured gap that can never be filled retrospectively. Insure first, work second.
• Buying the lowest limit to save money. If a limit doesn't meet a client's minimum requirement, you can't act for them — and it may not cover a serious error. Match your limit to your real exposure and your clients' terms.
• Letting cover lapse at renewal. Because PI is claims-made, a gap between policies is genuinely dangerous. Diarise your renewal date and never let it slip.
• Under-estimating turnover to look cheaper. An inaccurate figure is a poor presentation of the risk and can cause problems at claim time. Give a realistic estimate.
• Assuming your old firm's policy still protects you. Once you leave a firm and practise in your own name, that firm's insurance no longer covers your independent work. You need your own policy.
• Not reading the schedule. Know your limit, your excess, your retroactive date and any conditions. A good broker will walk you through each of these.

8. About Apex — and why we can quote this quickly

Apex Insurance Brokers Limited is an FCA-authorised insurance broker based in Bristol (FRN 724952). We arrange professional indemnity cover for regulated professionals across the UK, including newly qualified and newly independent practitioners setting up for the first time.

Because a new Costs Lawyer's application is straightforward — no accounts history, no claims record, a clear CLSB status — we can usually turn a first quote around quickly. We'll help you settle on a sensible limit, explain the claims-made mechanics in plain English, and make sure your certificate is something you can confidently show to instructing solicitors. When your practice grows, we're here to review your limit and keep your cover continuous year on year.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy.