Reviewed by Matthew Bartlett, Director · Last reviewed 8 July 2026
Buying professional indemnity cover for a firm's first year is a different exercise from renewing an established practice. There is no claims history to lean on, the regulator has already set an expectation from day one, and the underwriter's questions come from what the firm intends to do rather than what it has done. This entry covers what first-year firms should expect, how insurers approach a new-business submission, and how to shape the presentation so the market gives it a fair reading.
A new practice usually enters the market with a business plan rather than a track record. Underwriters read the plan carefully. They want to understand the founders, the mix of intended work, the client base the firm is targeting, whether principals are moving from a prior practice with a live book, and how the firm proposes to manage the risks its profession is known for — conveyancing volumes for a new solicitor, valuation exposure for a new surveyor, structural sign-off for a new engineer, DB pension transfer scope for a new financial adviser.
Expect the submission to feel more like an application than a form. CVs of the founding principals, evidence of the regulator authorisation, a business plan or heads-of-terms document, first-year fee income projections split by work type, and any run-off arrangements for prior practices all form part of the picture. The underwriter uses these to build the risk view that a claims history would otherwise supply.
Most regulated professions require PI cover in place from the moment the firm is authorised to practise, not after the first client is billed. The specific minimum limits, wordings, and run-off requirements depend on the regulator:
Solicitors in England and Wales must hold cover meeting the SRA Minimum Terms and Conditions (SRA MTC) from a Participating Insurer — the terms are non-negotiable and include a minimum limit and mandatory run-off. In Scotland the position runs through the Master Policy administered under Law Society of Scotland (LSS) arrangements. Accountants regulated by the ICAEW must meet ICAEW Bye-law 61, which sets minimum cover based on a turnover-linked formula. Surveyors regulated by RICS must meet the RICS Rules of Conduct Rule 9 requirements and the RICS-approved wording. Architects on the ARB register must meet ARB Standard 8. Financial advisers must hold PI cover complying with FCA IPRU-INV 13 (or MIPRU for insurance intermediaries).
None of these are optional and none can be delayed to a firm's second year.
Insurance Act 2015 s.3 imposes a duty of fair presentation on commercial insureds at inception. For a first-year firm the absence of a claims history does not lighten this duty — it changes its shape. Every founding principal is expected to disclose their prior claims and circumstances history from previous practices, whether or not a formal notification was made. Anything a reasonable underwriter would want to know about the founders' track record, the regulator engagement in any prior firm, or any circumstance that could give rise to a claim against work still on the founders' file is disclosable.
The safest approach is a covering narrative that walks the underwriter through the individuals, their prior practices, any prior notifications made, and any circumstances known at the point of application. This closes the door on a later argument that a material fact was left out.
The regulator sets a floor, not a ceiling. First-year firms often want to consider limits above the mandated minimum where a single instruction or contract could carry an exposure larger than the floor supports, defence-costs cover in addition to the limit rather than within it where the wording allows, cover for prior practice where founders are carrying forward client work with a residual liability, and separate cyber cover where the firm holds client data. Discuss each of these before binding rather than adding them later on endorsement.
Apex Insurance Brokers is authorised and regulated by the Financial Conduct Authority (firm reference 724952). We place first-year PI for solicitors, accountants, surveyors, architects, engineers, IT consultants, financial advisers and management consultants with Lloyd's syndicates and specialist company markets. A named broker takes the business-plan conversation, shapes the submission, and speaks to the market on the founders' behalf. We work backwards from the regulator's authorisation date so cover incepts on the day the firm is permitted to trade. Ninety-five per cent of our clients renew with us the following year.
Starting a new practice
Get cover in place before the regulator asks for it. A named broker reads every submission and comes back with terms within one working day.