A short guide to professional liability insurance (PII) for lawyers in 2022


An overview of the latest developments

Professional indemnity insurance (PII) is one of the main overhead costs that UK lawyers and law firms incur in their practice. Although we have only just entered 2022, the April 2022 Avocado PII renewal season is rapidly gaining momentum. More importantly, there is a high turnover rate of insurance companies entering and exiting the market. Therefore, now is the time to research the best providers, PII premiums and payment solutions to cover their properties and personal assets, should their practice fail. With new variants of COVID-19 making headlines and causing business disruption, lawyers are likely to see an increased number of malpractice claims.

Market overview and latest developments

The professional liability insurance market for notaries is becoming more volatile every year. This is mainly due to the minimum conditions demanded of insurers by the SRA, causing an unprecedented level of resentment. As a result, many traditional IP insurers avoid insuring lawyers.

With fewer players in the market, the level of competition changes drastically and the cost of insurance continues to rise. In terms of revenue, the PII market represents over £250 million in annual premiums, thanks to over 11,000 law firms practicing in England and Wales.

Sharp increase in PII premiums

With annual premiums increasing by more than 27% on average across all UK law firms, the number of insurers offering cover has dropped significantly. This trend is set to continue for the April 2022 renewal season, particularly after the primary limits were reduced to £2m in 2021.

SMB law firms face demand for personal guarantees

Unfortunately, increasing PII premiums are not the biggest challenge facing small business law firms. Another trend that is developing in the market is a growing demand for personal guarantees by certain insurers, which put notaries at even greater risk than before. It is essentially a written promise from the director of a law firm guaranteeing that he will personally repay any debt owed by the firm, even if he has to use his home and other personal assets to do so. .

Personal guarantee insurance becomes popular

In response to the growing demand for personal guarantees by insurers, a new solution has appeared on the market, designed specifically to help protect law firms against the loss of their guarantees in the event of an unfortunate event. The Personal Guarantee Insurance (IGP) is an annual policy offering notaries and SME law firms the cover needed to repay a debt when they do not have available cash.

With personal guarantees becoming a trending requirement, lawyers are preparing for the likelihood of this solution becoming a mandatory requirement to balance the risk of both parties. Thus, any business seeking coverage should ask their insurance broker to confirm whether an IGP will be required as well as the liquidation premium to fully understand what is at stake in the event that their business faces financial turmoil.

Cyber ​​insurance requirements

Finally, conveyancing companies may be required to purchase stand-alone cyber cover, as the SRA recently clarified that the consumer protection offered by PII for due losses incurred due to cyber security threats will only cover customers and third-party apps. However, the fact that cyber insurance becomes mandatory will have no impact on the minimum conditions.


To say that there is a lot going on in the professional indemnity insurance market would be an understatement. What we know for sure is that PII remains an important policy for law firms and conveyancing firms looking to protect their financial assets from loss. With April 2022 on the horizon, businesses need to sit down and carefully assess their risk and seek out the best coverage available in the market.

From file reviews, gap analysis and financial guarantee support, the team Legal eye can provide a 360° view of your business to help prepare your PII applications. Call 020 3051 2049 or email [email protected]

This article has been submitted for publication by Legal Eye as part of their advertising agreement with Today’s Conveyancer. The opinions expressed in this article are those of the author and not those of Today’s Conveyancer.


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