SRA Minimum Terms and Conditions

The Minimum Terms and Conditions (MTC) of the Solicitors Regulation Authority (SRA) are the terms that compulsory professional indemnity insurance for solicitors in England and Wales must meet. A solicitor cannot practice without cover that complies with them. They are annexed to the regulator's insurance rules (SRA Indemnity Insurance Rules). The minimum is 2 million pounds for any one claim, raised to 3 million for limited liability structures, companies and limited liability partnerships (LLPs). The minimum carries no annual aggregate: a firm that receives five claims in a year has the limit available five times, with defense costs on top. That is the reverse of professional liability almost everywhere else, where a limit per policy year is the rule. The MTC mostly list what the contract cannot do. Permitted exclusions are exhaustively listed. The insurer cannot avoid the contract or deny cover for misrepresentation or non-disclosure: it pays the injured client, then, where appropriate, exercises its right of recovery against the insured. The deductible cannot be raised against the claimant; if the firm does not pay it, the insurer pays it and recovers it from the firm. A firm that ceases practice without a successor receives six years of cover for later claims (run-off). Because the wording is fixed by the regulator, competition between insurers turns on price and on how the firm is read: practice areas, share of conveyancing, controls over client accounts, claims history. The English market thus carries a risk others refuse, that of an insured who lied at underwriting.