Yes. If you are a practising solicitor in England and Wales providing reserved legal activities to the public, professional indemnity insurance is mandatory. You cannot open the doors to clients without it. The requirement sits in the SRA Indemnity Insurance Rules 2020, made under the Solicitors Act 1974 and part of the SRA Standards and Regulations 2019.
The rule is unambiguous: any firm authorised by the Solicitors Regulation Authority must hold qualifying insurance from a participating insurer on the Minimum Terms and Conditions (MTC) before it starts to practise, and must maintain that cover for every day it is authorised.
The MTC set a floor, not a ceiling. Firms may buy higher limits and broader terms, and many do, but the minimum a participating insurer must provide is fixed by the SRA.
When a firm closes, merges into another practice without a succeeding practice picking up its liabilities, or otherwise ceases to trade, run-off cover is compulsory for a minimum of six years from the date of cessation. This is one of the most misunderstood parts of the regime.
Run-off is expensive — commonly two-and-a-half to three times the last annual premium, paid up front — and it cannot be avoided by letting a firm dissolve. Insurers are required by the MTC to provide the six-year extension automatically. Founders and partners planning a retirement or a merger need to build the run-off cost into the exit plan long before the last matter closes.
Not every solicitor personally arranges MTC-compliant cover. The route depends on the structure.
The SRA Compensation Fund provides limited relief to clients where a firm has misappropriated money or where run-off has been exhausted. It is a backstop of last resort, not a replacement for PI cover. Solicitors sometimes assume the Fund covers professional negligence; it does not, in the ordinary sense. Do not build a business plan on that assumption.
Trading without MTC-compliant PI is a fundamental breach of the SRA rules. The consequences include intervention by the SRA — the regulator can shut the firm down, seize files and freeze the client account — regulatory action against the individual solicitors involved, and personal liability for uninsured claims. In practice, no responsible solicitor operates without cover; the point is that the safety net simply is not there if you try.
A solicitor is thinking about leaving a firm to set up on her own, offering conveyancing and private client work. Does she need PI insurance before she takes on her first client? Yes. She needs a live MTC-compliant policy in place from the day she is authorised to practise. The minimum limit is £2 million each and every claim. She should also plan, from day one, for the six-year run-off obligation that will apply whenever she eventually closes or sells the practice. A specialist broker can approach the participating insurers, present the risk and place cover; the premium range depends on the work mix, claims history and revenue projection.
Solicitors' PI is only offered by insurers on the SRA's participating insurers list, which changes year to year. You can approach an insurer directly, or use a specialist broker who negotiates on your behalf. The right time to speak to a broker is early — before the deadline, not on it.
Apex Insurance Brokers is an FCA-authorised broker with a professions focus and places solicitors' PI on MTC-compliant terms with participating insurers. The solicitors PI guide sets out the full picture. Related guides sit at architects PI, accountants PI and IFAs PI.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.