The Solicitors Regulation Authority sets the minimum shape of every practising firm's professional indemnity policy through the Minimum Terms and Conditions, or MTC, which sit in the SRA Indemnity Insurance Rules. The starting point is the insuring clause. Under the MTC, a qualifying policy must indemnify each insured against civil liability to the extent that it arises from private legal practice carried on by the firm. That single sentence does a great deal of work, and understanding it is the foundation for reading the rest of the wording.
The phrase used is civil liability, not negligence. That is intentional. A solicitor can incur civil liability in several ways: negligence, breach of contract, breach of trust, breach of fiduciary duty, defamation in the course of practice and breach of warranty of authority among them. Many commercial professional indemnity wordings for other professions are drafted around negligent acts, errors or omissions. The MTC insuring clause is wider, so a firm cannot find that a claim framed in breach of trust rather than negligence falls outside cover. This is one of the reasons solicitor cover under the MTC tends to be broader at its core than the general-market wordings a firm outside a compulsory regime might buy.
Cover attaches to civil liability arising from private legal practice. The Rules define private legal practice in a way that captures the ordinary work of the firm and certain connected activities carried on through it. Where a solicitor acts outside private legal practice - for instance in a purely personal capacity, or through a separate business the firm does not conduct - the MTC insuring clause does not reach that conduct, and separate arrangements may be needed. Firms with unusual structures should map their activities against the definition rather than assume everything they do is picked up.
A qualifying policy is written on a claims-made basis, so it responds to claims first made against the insured during the period of insurance, together with circumstances notified during that period. The MTC layers specific protections on top of the ordinary claims-made structure, including mandatory run-off cover and restrictions on how an insurer may decline. Those protections are covered in the related entries in this reference series. The point to hold onto is that the insuring clause is the promise, and the balance of the MTC is a set of rules about how that promise must be honoured.
Because the insuring clause is drafted around civil liability arising from practice, a firm's exposure is defined by the work it does, not by the label a claimant chooses to attach to a claim. Conveyancing, probate, litigation and commercial advice all generate liabilities of different shapes, and the compulsory wording is designed so that a genuine practice-related liability is not lost on a technical characterisation. Firms comparing their own risk profile against neighbouring professions can see how the solicitors' regime works alongside, for example, the position for accountants in our accountants' PI guide. For a fuller treatment of the regime as a whole, see the solicitors' PI insurance guide.
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.