Updated 11 July 2016
Professional indemnity insurance
Having professional indemnity insurance is a practising requirement; all firms must have a valid policy in place to be able to continue in private practice.
Outcome 7.13 states: "you assess and purchase the level of professional indemnity insurance cover that is appropriate for your current and past practice, taking into account potential levels of claim by your clients and others and any alternative arrangements you or your client may make."
Insurance provides vital protection for clients should unexpected events cause them financial loss.
When arranging cover, you must comply with the SRA Minimum Terms and Conditions. View guidance on professional indemnity insurance from our Ethics Team:
- The Insurance Act 2015 and consequential changes to the MTC - issued on 6 July 2016
The Law Society have produced a practice note on professional indemnity insurance.
If you cannot secure a new policy
Those firms that do no renew their policy for whatever reason and continue to practise will enter the Extended Policy Period (EPP).
The EPP ensures that further cover is provided by the last-named insurer for the firm for a further 90 days. The firm can use this time to secure insurance, however, after 30 days it cannot take on any new business.
It must also draw up parallel plans to ensure that, should it not gain cover, it can close in a proper manner at the end of the 90 days. Read more information on closing down.
These firms should email firstname.lastname@example.org within five business days of entry. It is also useful if they provide context on if they are planning to close or are still seeking insurance. Any of those firms that are still in the EPP after the 30 days and therefore enter the Cessation Period (CP) also have a duty to let us know of their insurance status.
Firms must also notify us if they obtain a backdated policy of insurance when in the EPP, stating the name of the new insurer and policy number.
Solicitors Indemnity Fund
The Solicitors Indemnity Fund (SIF) currently provides run-off cover for firms that closed before 30 September 2000 and supplementary run-off cover for firms that have closed.
On 30 September 2020, SIF will stop providing supplementary post run-off cover. If you were the owner or manager of a firm affected by this, you should assess your own liabilities for any claims made after 30 September 2020 and make any necessary arrangements.
Please use www.sra.org.uk/indemnity to link to this page.