Scottish solicitors do not buy professional indemnity insurance on the open market the way their English and Welsh counterparts do. Cover is provided under a compulsory Master Policy arranged by the Law Society of Scotland and brokered by Lockton. This entry explains what the Master Policy covers, where it differs from the SRA Minimum Terms and Conditions, and where a Scottish firm might still need Apex or another broker alongside it.
Who is inside the scheme
Every practising unit regulated by the Law Society of Scotland — sole practitioners, partnerships, LLPs and incorporated practices — is required to have primary PI cover under the Master Policy while they hold a practising certificate that permits the holding of client money or the giving of legal advice to clients. The requirement sits under the Society's practice rules and is a condition of the practising certificate rather than an optional purchase.
The Master Policy is renewed annually on 1 November. Every regulated firm sits on the same policy year, on the same primary wording, with a single administering broker (Lockton) placing the aggregate risk with a small panel of insurers.
What the Master Policy covers
The primary limit is £2 million any one claim, with an annual aggregate at higher figures for defence costs. Cover is on a claims-made basis and responds to claims made against the practice during the policy year in respect of civil liability arising from the provision of legal services. The wording covers the practice, its partners and members, its employees, its consultants (subject to the standard "under the practice's control" tests) and, importantly, its predecessor practices to the extent brought into the scheme.
Defence costs sit in addition to the limit rather than eroding it — a material difference from many open-market wordings — and the policy carries the usual PI insured perils: negligent act, error or omission, breach of duty, and vicarious liability for the same acts of employees and consultants.
Where the Master Policy differs from the SRA MTC
The Solicitors Regulation Authority Minimum Terms and Conditions apply to firms regulated in England and Wales. The two regimes share a structure — compulsory, claims-made, wide insuring clause — but differ in several specific respects that matter at renewal and at claim.
- Placement. SRA firms buy on the open market from qualifying insurers; Scottish firms buy through the Master Policy scheme. There is no shopping around at the primary level.
- Limit. The SRA MTC minimum is £2 million (£3 million for LLPs and companies). The LSS Master Policy primary is £2 million any one claim across the board.
- Aggregation. The Master Policy applies its own aggregation approach to related claims; SRA firms live with the qualifying-insurers' own wordings within MTC bounds.
- Excess. Master Policy excess sits with the firm on a per-claim basis and is negotiated at scheme level rather than firm level.
- Run-off. Master Policy run-off is provided automatically for the statutory period when a firm closes and no successor practice is nominated. SRA run-off is a six-year policy the closing firm must arrange.
Neither regime is generous or restrictive in the abstract — they are structured differently, and the practical implications depend on the firm.
Run-off under the Master Policy
When a Scottish practice closes without a successor, the Master Policy provides run-off cover for the statutory period (currently two years) at scheme level, with the scheme funding the tail. Where a successor practice is nominated and accepted, the successor's Master Policy inherits the closed practice's exposure and no separate run-off arrangement is needed. Firms considering closure should notify the Society and Lockton early — the succession-versus-run-off decision has cost and cover implications that are cleaner to resolve before the practising certificate lapses.
Aggregation — the same principle, a Scottish frame
Aggregation is the mechanism by which multiple claims arising from a series of related matters are treated as a single claim for limit and excess purposes. The Master Policy wording sets out its own aggregation trigger — related acts, errors or omissions in the same or a connected matter — and the practical question at claim is whether the insurer's application of aggregation reduces the number of £2m limits available. Firms with a book of very similar transactional work (mass conveyancing, series-based commercial work) should read the aggregation clause carefully at every renewal.
Where a Scottish firm may still need Apex
The Master Policy is comprehensive for the primary risk of a wholly Scottish-regulated practice. It is not designed to cover everything a modern practice does, and firms sometimes need cover alongside it:
- Excess of Master Policy limit. Firms handling matters where £2m is not enough sometimes buy an excess-layer policy in the London or company market to sit above the Master Policy.
- Cross-border practice. Firms with English-registered arms — separate legal entities regulated by the SRA — need SRA MTC-compliant primary cover for the English entity in addition to Master Policy cover for the Scottish entity.
- Non-legal activities. Ancillary businesses, executry services outside the legal scope, and consultancy arms may fall outside the Master Policy insuring clause and need separate cover.
- Wind-down and top-up. Firms restructuring, merging or winding down sometimes need bridging cover or top-up run-off beyond the statutory scheme period.
Why Apex handles this
Apex works with professional firms on both sides of the border. We do not place the LSS Master Policy — that scheme sits with Lockton on behalf of the Law Society of Scotland — but we help Scottish-registered firms that also carry English work, hybrid practices, and firms winding down that need top-up or run-off cover the Master Policy does not extend to. If your practice sits partly inside and partly outside the scheme, we can talk through the boundary.
Practical points at renewal
The Master Policy renewal window opens in early autumn and firms are asked to complete a proposal that captures work-type split, fee income, claims history and any acts of restructuring. The proposal is the firm's duty of fair presentation to insurers — the same principle that applies under Insurance Act 2015 for commercial cover — and matters that would influence a prudent underwriter should be disclosed with the same care as they would in the open market.
Firms that have taken on new activities in the past year, brought in new partners, opened non-Scottish offices, or changed the sectors they act for should flag those changes at renewal and expect them to be discussed with the underwriters.
Talk to Apex. Call Matt Bartlett on 0117 325 0027 or email info@apexinsurancebrokers.co.uk to discuss how this applies to your firm.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. Registered in England and Wales, company number 07014570. This page is general information about professional indemnity insurance and is not advice on any specific policy or claim. For a considered view on your position, speak to Matt Bartlett on 0117 325 0027.