Reviewed by Matthew Bartlett, Director · Last reviewed 8 July 2026
Trading as a sole trader is the simplest way to run a practice. It is also the shape of trading with the most personal exposure. There is no separate legal person between the practitioner and the client, so a claim against the work is a claim against the individual. This entry sets out what that means for professional indemnity cover, how insurers rate a sole practitioner risk, how the regulator treats sole trader entities, and what run-off looks like when the practitioner stops.
A sole trader is not a distinct legal entity from the person running it. Contracts are with the individual. Liability for defective advice or negligent work rests with the individual. There is no corporate veil to argue over. That matters for PI in two ways. First, the policy is written in the practitioner's name (usually the trading name and the individual), so run-off obligations follow the individual through career changes. Second, personal assets sit behind the professional exposure, so the choice of limit is a personal decision as much as a business one.
Practitioners moving from a partnership or LLP to sole trader status sometimes underestimate this shift. What used to be a share of the firm's liability is now the whole liability. Underwriters read the transition with that in mind.
Most regulated professions rate PI premium primarily on annual fee income — the total revenue billed by the practice in a policy year — combined with the mix of work, the geographies served, the limit of indemnity, the excess, and the practitioner's claims and circumstances history. For a sole trader the fee income is by definition smaller than a multi-partner firm, so the pound-for-pound rate can look higher when expressed as a percentage. What matters practically is the absolute premium and whether the limit chosen matches the largest single instruction the practitioner is likely to take on.
Some markets apply a minimum premium below which the risk is not economic to write. Sole practitioners often meet the minimum-premium threshold rather than the fee-income-times-rate figure. That is not a penalty — it is the cost of the underwriter reviewing the file, wording the policy and handling any notification.
Regulators treat sole practitioners differently from multi-principal firms in ways that affect the PI purchase. A few examples:
The SRA Minimum Terms and Conditions apply to sole practitioner solicitors in England and Wales in the same way as to LLPs and incorporated practices, but the run-off obligation on cessation is a personal one that follows the practitioner. RICS Rules of Conduct Rule 9 treats a sole surveyor practice the same way, with the same minimum limit calibrated on the practice's turnover band. ICAEW Bye-law 61 sets the minimum turnover-linked cover for ICAEW-regulated accountants regardless of whether the practice is a sole trader or a firm. ARB Standard 8 requires each ARB-registered architect to hold adequate cover; a sole practitioner architect meets that duty in their own name. Financial advisers regulated under FCA IPRU-INV 13 meet the sole-trader firm requirements the same way an incorporated firm does.
In none of these cases does trading as a sole trader remove or reduce the mandatory cover.
Run-off cover is the cover that responds to claims first notified after the practice has ceased trading, in respect of work done while it was trading. PI is written on a claims-made basis, so once the primary policy expires there is nothing to respond to a late-notified circumstance unless run-off is in place.
The regulator's run-off requirements vary. Solicitors under the SRA MTC must hold run-off for six years post-cessation, provided automatically by the last insurer under the MTC. Surveyors under RICS Rule 9 must hold run-off for six years. Architects under ARB Standard 8 must hold adequate run-off. Accountants under ICAEW Bye-law 61 are required to hold run-off cover in accordance with the profession's rules. Financial advisers regulated by the FCA have run-off expectations tied to their permissions.
For a sole trader the practical question is not "do I need run-off" — the regulator has answered that — but "how do I fund it". Some practitioners build a run-off reserve during the last few years of practice. Others take a one-off run-off premium at cessation from the incumbent insurer. A named broker can walk through the options before the closing date, not on the day.
Apex Insurance Brokers is authorised and regulated by the Financial Conduct Authority (firm reference 724952). We place PI cover for sole practitioner solicitors, accountants, surveyors, architects, engineers, IT consultants, financial advisers and management consultants with Lloyd's syndicates and specialist company markets. A named broker handles the file, walks the practitioner through limit and excess choices, and manages the run-off conversation in the year before cessation rather than in the week of it. Ninety-five per cent of our clients renew with us the following year.
Trading as a sole practitioner
Speak to a broker who reads the wording, not a portal. A named broker reads every submission and comes back with terms within one working day.