Solicitors facing issues with professional indemnity insurance renewal

professional indemnity insurance renewal

As the traditional 1st October professional indemnity insurance (“PII”) renewal date approaches, law firms are being urged to start the process of renewing their insurance now. With changes in the legal market and an oncoming economic recession, the hard professional indemnity insurance market is set to continue with another year of increased premium rates and a number of firms potentially becoming uninsurable.

In preparation for the renewal process, the Law Society advises that solicitors are organised and that they should prepare and submit their applications to PII insurers in good time. A large proportion of solicitors do not submit their presentations until the last a couple of weeks leading up to renewal, and others miss the deadline completely, leading to them being placed in the extended period, which must be reported to the SRA – this is not just a way to get more time to renew, it is a punitive measure.

Why are solicitors facing issues with professional indemnity insurance renewal?

Over the past few years, law firms in England and Wales have found it difficult to obtain professional indemnity insurance cover at an acceptable price for a host of reasons. Economic factors, such as Brexit and Covid-19 have played a significant role in the hardening of the professional indemnity insurance market, and with a recession on the horizon, many more law firms face the possibility of prohibitively expensive premiums. Other reasons for insurance brokers becoming unwilling to offer cover to solicitors include the following:

  • SRA minimum terms and conditions (MTC) – This type of insurance for legal professionals is less profitable and more difficult to underwrite than other types of insurance. The reason for this is due to the SRA MTC, which often acts as a financial guarantee, containing more terms and conditions and a number of exclusions. The broad wording of the MTC may deter new insurers from providing cover for solicitors.
  • Claims being pursued against solicitors – Although the number of claims being made against solicitors has not drastically increased, the monetary values for these types of claims are surging. Whilst many firms are not experiencing claims against them, the value of the pay-outs for those who are experiencing claims now exceeds the total premium collected by insurers for all solicitors. As the volume of work for some legal sectors, such as conveyancing and contentious probate increases, the risk of high-value claims will also increase, leading to an increased risk for insurers.
  • Cyber-attacks – Cyber-attacks are becoming more and more common in all industries. As solicitors are in possession of high volumes of sensitive client data, claims against law firms for data breaches due to cyber-attacks are likely.


What happens if solicitors cannot renew their insurance?

Renewing your professional indemnity insurance is vital for your firm’s risk management, to cover claims made against the firm. If a law firm is unable to obtain professional indemnity insurance, they will be required to operate within the Solicitors Regulation Authority extended policy period and cessation period.

The extended policy period will provide an extra 30 days of cover to allow the firm more time to obtain cover. The firm will enter the cessation period if they are unable to get cover after the extended policy period. The cessation period will allow the firm 60 days to plan an orderly closure of the firm, or alternatively, merge or be taken over by another firm.


How can Recovery First assist?

Recovery First can assist firms wishing to exit specific areas of law. You may decide to exit a high-risk market to ensure you obtain adequate professional indemnity insurance for the rest of the firm. Alternatively, you may be struggling to obtain professional indemnity insurance cover, and therefore, you may wish to merge your firm or plan an orderly closure.

Whatever route you choose to take for your firm, Recovery First can assist in the process by transferring your files to the most appropriate firm on our panel of solicitors, ensure the most positive and profitable outcome is achieved for your firm.

An additional benefit being that the firm’s clients not only get a seamless transfer, but they are also married up with a firm specialised in their particular needs.

The unique scheme offered by Recovery First is suitable for law firms and professional advisors, including restructuring and insolvency solicitors, insolvency practitioners and accountants. Our team manage the transfer of files from start to finish, placing case files with an approved law firm so as to protect the integrity of the client’s case.

We will provide you with all the advice and support you need, and we guarantee 100% confidentiality for all clients. If you would like to find out more about Recovery First’s process, feel free to get in touch with our Director David Johnstone at or 07887796989 or our Director Sally Dunscombe at or 07774205870. 

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David Johnstone:


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