Solicitors’ Professional Indemnity Insurance Report

Towards the end of last month, The Law Society published its latest report on the state of the professional indemnity insurance market for medium and small firms of solicitors practising in England and Wales. The report, which is commissioned annually, provides an interesting insight into the workings of this market, as well as an important indication of its current state of health.

Prior to 1 September 2000, solicitors’ professional indemnity insurance cover was provided by the Solicitors Indemnity Fund, which was a mutual fund to which all solicitors contributed. However, since that date, and with the primary aim of reducing policy premiums, professional indemnity insurance cover has been provided on the open market.

Some professions still obtain professional indemnity insurance cover, or E&O (viz. errors and omissions) cover as it is sometimes called, through a mutual scheme. These include barristers, who obtain cover through the Bar Mutual Fund, and architects, many of whom obtain cover through Wren Insurance Association Ltd.


The Law Society’s report is based on a telephone survey of 605 firms, ranging in size from sole practitioners up to 25 partners. The sample of firms contacted was supplied by The Law Society and representative of a total of 9,316 member-firms in this size category. This itself, represents approximately 99% of the total number of firms of solicitors currently operating in England and Wales.

Key findings

The conducted survey examined a range of issues, including the cost to firms of purchasing professional indemnity insurance, the amount of cover purchased by solicitors and the market share held by the insurers and brokers operating within it.

Some of the key findings of interest are that:

  • The traditional policy commencement date of 1 October is still the most popular date upon which firms renew their professional indemnity insurance cover;
  • An increased number of firms (34%) have taken out policies which exceed the traditional 12 months duration;
  • The vast majority of firms (76%) chose to renew with their existing insurer;
  • Travelers remained the largest insurer of solicitors with 15% of the surveyed market, followed by AM Trust with 14% of the market and QBE with 8%;
  • In the majority of cases it was the recommendation of brokers which determined a firm’s choice of insurer, followed closely by the level of premium charged;
  • Premiums have remained stable over the last year and equate to approximately 5% of a firm’s annual turnover;
  • The mean policy excess paid by firms is approximately £5,000;
  • The proportion of firms contacting just one broker has risen again this year to 74%, and in comparison to only 47% in 2013-14;
  • The proportion of firms purchasing additional ‘top up’ cover, over and above the minimum cover required by the Solicitors Regulation Authority, was broadly unchanged, although the mean amount of cover purchased increased by 11% to £7.155 million;
  • The median cost of run-off cover purchased by solicitors upon closure of their practice remained at 300%.


Overall the survey makes for encouraging reading. For the profession, it depicts a mature market that is well supported by an established network of experienced brokers. For consumers, whether they be business entities or private individuals, it suggests that solicitors are taking their insurance obligations seriously and purchasing additional cover where necessary, to protect their clients against financial loss in the unfortunate event that professional negligence should occur.

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