SRA MTC continuous cover clause: solicitors PI backstop when insurers decline

Reviewed by Matthew Bartlett, Director · Last reviewed 2026-07-06

~4 min read

The continuous cover clause in the SRA Minimum Terms and Conditions (MTC) is one of the least understood but most important protections available to a solicitors firm at renewal. It sits at Schedule 1 clause 6 of the SRA Indemnity Insurance Rules 2020, and it prevents a firm's existing professional indemnity insurer from walking away at renewal for pure risk-appetite reasons. If the firm has been continuously insured with the same insurer, that insurer must offer terms — subject to a narrow set of carve-outs.

The statutory backstop

Clause 6 requires a qualifying insurer that has provided PI cover in the prior period to offer renewal terms for the next period, save where a carve-out applies. Without it, an insurer could decline to renew the moment a claim was notified, leaving the firm to find replacement cover from a market that would also see the notified matter on the proposal form. The clause exists so that a firm with a live claim or notified circumstance is not "policy-shopped" out of cover at the worst possible moment.

The clause does not fix the price. It requires an offer, not a competitive one. An insurer that has lost its appetite can price the renewal at a level that reflects the risk it now sees. What it cannot do is decline outright for reasons that fall outside the permitted carve-outs.

What triggers the clause

The clause bites where the firm has been continuously insured with the same qualifying insurer through the preceding period — an unbroken policy relationship, not a change of broker, not a change of legal entity within the firm, but the same insurer on risk without a gap. Firms that moved insurer at the last renewal do not have the benefit of clause 6 against the new insurer until the following year.

The carve-outs — when an insurer can still decline

The clause permits an insurer to decline renewal in a narrow set of circumstances: fraud or dishonesty by the insured; material non-disclosure or misrepresentation in the proposal or during the policy period; failure to pay the premium when due; and cases where the policy was previously cancelled for cause. The Insurance Act 2015 section 3 duty of fair presentation sits behind the non-disclosure carve-out — a commercial insured owes the insurer a fair presentation at inception, renewal and material variation, and a failure to meet that duty can open the door to the carve-out.

A properly notified circumstance is not, by itself, a material non-disclosure. The firm has done what the policy required. A notification made in accordance with the policy terms sits inside the cover, not outside it.

Practical effect

The practical effect is that a firm with a live claim or notified circumstance retains a route to renewal with the incumbent insurer even where the wider market has hardened. The clause is a floor, not a ceiling. It does not prevent the firm from approaching other insurers on the SRA-approved participating insurer panel — currently a panel of around 52 insurers — and it may well be that better terms are found elsewhere. Where they are not, the incumbent remains on the hook to offer.

Worked example

Worked example — a four-partner firm. The firm has been insured with the same Lloyd's syndicate for eight consecutive years. In January 2026 it notified a circumstance concerning a missed limitation date, with a reserve indication of £180,000. In September 2026 the syndicate signals it may not renew because of the notified matter. The broker relies on clause 6. The syndicate cannot decline on that basis alone — the matter was properly notified, so it is not material non-disclosure, and no other carve-out is in play. The syndicate reluctantly quotes at a 35% premium uplift with a restructured self-insured excess. The firm accepts. In parallel, the broker approaches four other insurers on the participating insurer panel; three return terms, one on less severe terms than the incumbent. The firm has options — because clause 6 kept the incumbent at the table while the broker canvassed the market.

If the insurer relies on a carve-out

Where an insurer does invoke a carve-out, the firm is not left without options. The broker can approach the wider panel of qualifying insurers on a fresh proposal. Where no cover is placed by the renewal date, the firm enters the extended indemnity period and then the cessation period under the MTC, and the SRA Compensation Fund Rules provide a backstop for clients in defined circumstances. None of this is a substitute for placed cover, but the client protection architecture keeps working even where clause 6 does not.