About PI for Solicitors

What is Professional Indemnity Insurance and why do solicitors need it? PI insurance ensures that both you and your clients are financially protected in the event of mistakes or omissions being made by your Practice. PI insurance is designed to meet the costs of defending claims and paying any damages. Indeed, Solicitors are not permitted to practice without PI insurance. What cover do Solicitors need? Primary cover The mandatory minimum level of cover set by the Law Society required of each legal practice is £2,000,000 for Partnerships and £3,000,000 for LLP's or incorporated practices.
The Solicitors Regulatory Authority also dictate that cover must be underwritten by an approved insurer who abides by the minimum terms and conditions laid down by the Law Society.

Top up cover
The amount of cover you need and select will be dictated by a number of factors. These include:

• The size and demands of clients for whom you work
• The types of clients for whom you work
• The type of work you undertake

With this in mind, many firms choose to select cover in excess of the mandatory £2,000,000 limit.

It is important to regularly review the amount of cover you purchase. For example, the amount of cover your practice selected last year may not be appropriate for this year. Changes to your practice, type of work and client base will undoubtedly affect the limit of indemnity you choose for your practice.

How much will it cost?
The first £2,000,000 of cover is usually the most expensive. The premium for top up cover is normally significantly lower per £1,000,000 than the first £2,000,000.

The actual cost of your cover will depend on a number of factors, these include:

• Your practice's claims history
• Your practice's level of fee income
• The type of work your practice conducts
• The number of principals and employees
• The amount of excess you choose i.e. the initial amount you, not the insurer, will pay in the event of a claim
• Your practice's risk management regime