This FAQ is for partners, COLPs, COFAs and practice managers at SRA-regulated firms in England and Wales. It covers the questions we are most often asked about Solicitors PI: what the SRA Minimum Terms and Conditions require, where the market really sets pricing, how succession and run-off work, and what to watch for in conveyancing, residential and commercial property, conflicts and limitation-period exposure. The answers reflect the position under the SRA Standards and Regulations and the MTC in force at May 2026.
Solicitors PI is one of the most heavily regulated insurance arrangements in the UK. The MTC fixes a great deal of the wording, but the parts the firm controls — limit above £2m/£3m, excess, insurer choice, additional cover, succession arrangements — make a meaningful difference at claim. For tailored advice on your firm’s arrangements contact Apex Insurance Brokers on 0117 325 0027 or info@apexinsurancebrokers.co.uk. For the general PI position see our main PI FAQ hub.
What does the SRA require for solicitors’ PI?
All firms authorised by the Solicitors Regulation Authority must hold Professional Indemnity Insurance from a Participating Insurer on the SRA Minimum Terms and Conditions (MTC). The MTC is a prescribed minimum wording — insurers cannot offer cover below it but may offer broader terms. The minimum limit of indemnity is £2 million for any one claim for sole practitioners and partnerships, rising to £3 million for incorporated practices (LLPs and limited companies). Cover must be on a civil-liability basis, must include defence costs in addition to the limit, and the insurer cannot avoid the policy for non-disclosure or misrepresentation except in cases of fraudulent non-disclosure. The full MTC is available on the SRA website.
Who is a “Participating Insurer”?
A Participating Insurer is an insurance company that has signed the SRA’s Participating Insurer’s Agreement, contractually committing to write Solicitors PI on the MTC and to abide by the SRA’s framework — including providing run-off cover and dealing with the Assigned Risks Pool position. The list of Participating Insurers changes each renewal cycle and is published on the SRA’s website. Buying cover from a non-Participating Insurer does not satisfy the SRA’s requirement, however broad the wording, and would put the firm’s authorisation at risk. Your broker should confirm Participating Insurer status before binding.
When is the common renewal date for solicitors’ PI?
Most SRA-regulated firms renew on 1 October each year, a legacy of the old Solicitors’ Indemnity Fund arrangements. A handful of firms renew on alternative dates (1 April is the most common), but 1 October remains the dominant date and the market gears up around it. Practical implication: renewal information should be with brokers from mid-July, quotes by mid-September, and binding completed by 30 September. Last-minute renewals at the 1 October peak risk the Extended Policy Period kicking in if cover is not bound in time.
What is the “Extended Policy Period” and how does it work?
If a firm fails to renew its PI on or before expiry, the MTC provides an automatic Extended Policy Period (EPP) of up to 90 days — 30 days during which the firm can complete a renewal, followed by 60 days during which the firm is in cessation and must arrange run-off. During the EPP the firm cannot take on new work in respect of which it does not already have cover. The EPP is a safety net, not a planning tool — firms that rely on it routinely find their next renewal harder and more expensive. The Solicitors Indemnity Fund (SIF) historic position no longer provides post-six-year cover; firms must arrange this commercially.
What happens at the end of the run-off period?
After six years of run-off cover under the MTC framework, the firm’s mandated PI obligation ends. Claims arising from work done before run-off began but notified after the six-year window expires fall outside the run-off insurer’s responsibility. Historically the Solicitors Indemnity Fund provided post-six-year cover; from September 2023 the SIF was wound down and replaced by the SRA-run “Indemnity Fund” arrangement, with a sub-fund providing post-six-year cover funded by a levy. Practitioners closing firms in 2026 should check the current SRA position with their broker — this is an evolving area.
What is a “successor practice” and why does it matter?
The MTC defines a Successor Practice as a firm that has succeeded to the practice of another firm — typically through merger, acquisition or partnership reorganisation. The successor practice’s PI cover automatically responds to claims arising from the predecessor practice’s pre-succession work; the predecessor does not need separate run-off. This is a significant benefit but it is also a significant exposure for the acquiring firm — it inherits unknown historic claims. Successor practice status can be triggered inadvertently when a single principal joins another firm or a practice is reconstituted, and is one of the most negotiated points in a firm’s sale or merger.
How much PI cover does my law firm actually need?
The MTC sets the floor at £2m or £3m. Whether that is enough depends on the largest single transaction or matter the firm handles. A high-street conveyancing firm with average transactions of £400,000 may be over-insured at £3m and under-insured the day it handles a £5m commercial transaction. A small commercial law firm advising on a £20m corporate acquisition cannot rely on a £3m limit. Most firms with any commercial property, corporate or commercial litigation work buy in excess of the minimum — £5m to £10m is common for sub-£5m fee income firms, scaling up materially for larger practices. Defence costs sit above the limit under the MTC, which helps, but quantum on a contested professional negligence claim against a solicitor is rarely small.
What is “top-up” or “excess layer” PI for solicitors?
Top-up or excess layer cover is additional PI bought above the MTC primary layer to provide higher overall limits. The primary policy (on the MTC wording) might provide £3m of cover; an excess layer of £7m built on top would give the firm £10m of total cover. The excess layer typically follows the form of the primary but is not itself on the MTC wording and is not regulated by the SRA in the same way. Excess layers are widely available, generally well priced relative to primary cover, and are essential for firms with high-value matters. The broker structures the layering and ensures the wordings dovetail.
Why is conveyancing the dominant claims area?
Conveyancing accounts for a disproportionate share of solicitors’ PI claims by both number and value, for several reasons: high transaction volumes; reliance on multiple third parties whose errors can be blamed on the conveyancer; the consequences of a missed restriction, undisclosed charge or registration error are usually quantifiable in pounds; and lenders are sophisticated claimants who pursue solicitors aggressively for losses on default. Mortgage fraud, identity theft and source-of-funds issues add to the exposure. Firms with significant conveyancing fee income face higher premium loadings and harder underwriting; many insurers cap the proportion of total fees they will accept from conveyancing.
What is “lender claim” exposure?
When a borrower defaults and a property’s sale value does not repay the mortgage, lenders frequently sue the original conveyancer alleging negligence in the original transaction — failure to disclose a material fact, accepting an inappropriate source of funds, missing a restriction on title. Lender claims are run by specialist solicitors with a high success rate, and the quantum is set by the lender’s loss on the loan, not by the original transaction value. A firm that did £200,000 conveyances ten years ago can face a £150,000 lender claim today. Strong file management, identity and source-of-funds controls, and lender panel compliance are the practical defences.
What is the impact of acting for both buyer and seller, or borrower and lender?
Acting for parties whose interests may conflict — buyer and seller in a transaction, borrower and lender in a mortgage — is permitted under the SRA Code only in limited circumstances and creates concentrated conflict-of-interest exposure. Where a conflict materialises, the firm faces claims from both sides and often a regulatory complaint as well. PI cover responds to negligence claims arising from such work but does not cover regulatory consequences. Many insurers ask specific questions about conflict policies at proposal; firms with weak conflict procedures pay more.
Does the MTC cover dishonesty by a partner?
The MTC’s “innocent insured” provisions preserve cover for individual principals, partners and members who did not commit, condone or have knowledge of the dishonest act. This is one of the most important features of the MTC for partners in larger firms — without it, one rogue partner’s misconduct could collapse all partners’ cover. The protection applies only to the innocent individuals; the dishonest individual is not covered. The Compensation Fund administered by the SRA may also respond to client losses caused by solicitor dishonesty where the firm itself cannot pay.
Does the MTC cover Money Laundering Regulations breaches?
The MTC responds to civil liability claims arising from the firm’s regulated activities, including claims arising from inadequate AML procedures that caused a client or third party to suffer loss. It does not respond to regulatory fines for AML breaches imposed by the SRA, HMRC or the National Crime Agency. Defence costs of regulatory investigations into AML failures are sometimes covered under a regulatory defence sub-limit on the policy or on top-up cover, but the principal exposure is to the regulator’s penalty, which is uninsurable.
How does limitation affect old conveyancing claims?
The Limitation Act 1980 sets six years for contract claims and six years for negligence claims, with a longstop of fifteen years for negligence (with “latent damage” provisions extending to three years from date of knowledge). For conveyancing this means a 2018 transaction can give rise to a 2024 claim, with a longstop running to 2033. For Defective Premises Act work the Building Safety Act 2022 extends limitation considerably — up to thirty years retrospectively in some circumstances. The practical message: a closed file is not a forgotten file. Run-off cover and good file-retention practices matter.
What is “circumstance” notification and when should I make one?
A “circumstance” is any fact the firm becomes aware of that may give rise to a claim against it. The MTC requires firms to notify circumstances during the policy year. Typical triggers include: a client raising concern about a transaction; a missed deadline or limitation date; a discovery of an error in completed work; a letter from another firm asking questions about a closed matter; a regulatory letter; a lender query about an old conveyance. Notification preserves cover under the current policy even if the claim only crystallises years later — a far better position than relying on whichever policy is in force when the claim arrives.
What is the “aggregation” point in solicitors’ PI?
Aggregation determines whether multiple related claims count as one claim (with one limit) or as multiple claims (with multiple limits). The MTC includes a specific aggregation provision: claims arising from one act or omission, one series of related acts or omissions, or one matter or transaction, aggregate into a single claim. The clause’s interpretation matters when, for example, a single negligent piece of tax planning generates claims from multiple clients in the same scheme — does the firm have one £3m limit or many? Case law is mixed and the position is fact-specific.
What is “ATE” insurance and is it relevant to the firm’s own PI?
After-The-Event (ATE) insurance is bought by claimants to cover the costs they would have to pay if they lost their case — it is a claimant-side product, not a firm-protection product. It is mentioned here because solicitors routinely arrange ATE for clients, and a mistake in arranging or advising on ATE (failure to obtain cover, failure to maintain it, failure to disclose conditions) is itself a PI exposure. Insurers ask about ATE handling at proposal for litigation firms.
Does PI cover work as an executor or trustee?
Where a solicitor acts personally as executor or trustee, the MTC’s “professional services” cover normally responds — provided the appointment is in the course of the firm’s regulated business. Acting in a personal capacity outside the firm (a “favour” for a family friend) is generally not covered. Trustee and executor work has specific liability exposures — wrong distributions, beneficiary disputes, tax errors — and the wording’s response to these claims should be confirmed at proposal, particularly for firms with substantial private client practice.
How does the MTC treat partnership succession and lateral moves?
When a partner leaves one firm and joins another, the cover for that partner’s historic acts at the previous firm remains with the previous firm’s policy (or its successor practice / run-off). The new firm’s PI does not retrospectively pick up the joining partner’s old work unless the new firm acquires that book and becomes a successor practice. Lateral hires are generally not a PI event for the joining firm, provided the previous firm’s run-off or successor cover is properly in place — but where it is not, the joining partner’s personal exposure transfers with them. Diligence on the joining partner’s previous firm’s PI position is sensible.
What is the SRA Compensation Fund and how does it interact with PI?
The SRA Compensation Fund is a discretionary fund of last resort that compensates clients who have suffered loss because of a solicitor’s dishonesty or failure to account, where they cannot recover from the firm or its insurer. It is funded by contributions from the profession. It is not a substitute for PI — it does not respond to negligence claims, only to dishonesty / failure to account claims. The Fund and the PI policy interact: the insurer pays the negligence element; the Fund may pick up the dishonesty element if the firm cannot pay.
Do I need cyber insurance as well as PI?
For practical purposes, yes. Solicitors hold large volumes of personal and confidential client data, handle significant client money flows, and are increasingly the target of social engineering attacks — particularly conveyancing fraud where fake completion emails redirect deposits to fraudsters. PI covers a negligence claim from a client; cyber covers the firm’s own losses from the cyber event (ransomware, business interruption, regulatory investigation, breach notification costs) and provides incident response support. The two products are complementary; most reputable firms now hold both, with the cyber policy specifically structured to dovetail with the MTC primary.
Does the MTC cover claims relating to Court of Protection or deputyship work?
Yes, where the firm is acting in the course of its regulated business. Court of Protection work carries specific risks — failure to apply for capacity assessments, incorrect investment decisions for protected persons, breach of fiduciary duty as deputy — and is increasingly an area of claims activity. Some insurers ask supplementary questions for firms with material deputyship caseloads. The MTC’s broad wording responds, but high-volume deputyship practice is a factor in pricing.
What is “SIF” and what happened to it?
The Solicitors Indemnity Fund (SIF) was a profession-wide mutual that provided post-six-year run-off cover for closed firms — a safety net for claims arising more than six years after a firm’s cessation. SIF closed to new entrants in 2000, ran in run-off for many years, and was finally wound down. From September 2023, the SRA introduced replacement arrangements funded by a profession-wide levy to provide post-six-year cover for closed firms. The position is administered by the SRA and is updated periodically — practitioners closing a firm should check the current arrangements with their broker before relying on the cover.
Does PI cover undertaking failures?
Solicitors’ undertakings — binding promises given on behalf of the firm to the court, lenders or other parties — are personally enforceable against the firm and individual giving them. Failure to honour an undertaking can result in disciplinary action and a claim for the loss caused. PI under the MTC normally responds to negligence-based undertaking claims, but disciplinary proceedings and contempt of court are not covered. Strong undertaking management — central register, clear authorisation, prompt discharge — is the first defence; insurer attention to this at proposal has increased.
What questions do PI underwriters ask law firms at proposal?
Expect: corporate structure and principals’ history; fee income split by work type (conveyancing, commercial, litigation, probate, private client, immigration, criminal, family); jurisdiction and overseas activity; claims and circumstances in the last six years (and material claims older than that); details of large matters above defined thresholds; details of conflict-of-interest policies; AML controls; client money handling; lender panel memberships; details of any complaints to the Legal Ombudsman or referrals to the SRA; details of any directors / partners with regulatory history; cyber controls. The proposal form for solicitors is among the longest in the PI market.
What is the role of the broker in solicitors’ PI?
The broker prepares the proposal, identifies which Participating Insurers have appetite for the firm’s profile, negotiates terms, advises on cover above the MTC primary (excess layers, cyber, regulatory defence top-up), handles mid-term changes (succession, mergers, lateral hires) and supports notifications and claims. Because the MTC fixes a great deal of the primary wording, the broker’s value lies in market access, pricing negotiation, layering and claims advocacy rather than wording redrafting. Most law firms benefit from a broker that specialises in legal sector PI rather than a generalist commercial broker.
What should I do if I receive a letter of claim?
Stop responding to the claimant without taking advice; the same day, send the letter to your broker (or directly to your insurer’s claims team) with a brief factual summary; secure the underlying file and email correspondence; do not attempt to settle or negotiate before insurer-appointed solicitors are instructed. The MTC requires notification and prohibits prejudice to the insurer’s position — informal settlements or admissions before notification can affect cover. The first 48 hours after a letter of claim are the most important: get the right team involved, take the temperature down, and let the process work.
About Apex Insurance Brokers
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FCA firm reference 724952. Registered in England and Wales, Companies House 07014570. Trading address: c/o QCS, 53 Queen Charlotte Street, Bristol BS1 4HQ. Registered office: c/o Westcan, 5 Anglo Office Park, Bristol BS15 1NT. Email info@apexinsurancebrokers.co.uk, telephone 0117 325 0027. Last reviewed: May 2026.