Solicitors’ Top-Up Professional Indemnity (PI) insurance provides additional coverage beyond the mandatory minimum professional indemnity limit required for legal practice and is an optional extension to the compulsory insurance limit legal professionals must carry. It is designed to protect law firms from larger, high-value claims that exceed their statutory professional indemnity policy limits.
The policy can also be used to enhance the coverage and provide additional coverage benefits beyond what is provided under a statutory primary policy.
Nature of contract
The policy is claims made, meaning the allegations against the policyholder must first be made and notified to insurers, during the period of insurance. For more information on claims made policies refer to our article here.
Statutory PI Limits required in each state
| State | Limit Required | Insurer | Who needs cover |
| New South Wales (NSW) | $2M inclusive of defence costs pursuant to section 45 of the Legal Profession Uniform Law (NSW). | The approved policy is available from Lawcover. |
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| Victoria (VIC) | As of 1 July 2025, solicitors in VIC are required to hold a minimum of $2.5M inclusive of defence costs. | The approved provider of compulsory PI in VIC is The Legal Practitioners’ Liability Committee (LPLC). If law practices want to use a different insurer, they must apply for an exemption from the Victorian Legal Services Board (VLSB). |
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| Australian Capital Territory (ACT) | The policy must provide at least $2M per claim, including legal defence costs. | The list of insurers that the ACT Law Society has approved for the 2025/2026 financial year is available here. | All insurable solicitors in the ACT are required to hold an approved PI policy under section 311 of the Legal Profession Act 2006 (ACT). |
| Northern Territory (NT) | $2M per claim, inclusive of defence and claimant’s costs as mandated under s376 of the Legal Profession Act (NT) 2006. | The approved PI insurer is Lawcover Insurance Pty Ltd. | All law practices and solicitors who work in those practices. |
| Queensland (QLD) | As mandated under the Legal Profession Regulation 2017 (Qld), Section 73, solicitors in QLD are required to hold a minimum of $1.5M inclusive of defence costs. | Most QLD law practices are insured through Lexon Insurance Pte Ltd, which is wholly owned by the Queensland Law Society (QLS). If not insured by Lexon, insurance must be procured by an approved insurer or meet the standards set by the QLS or Bar Association. |
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| Western Australia (WA) | Minimum of $2M per claim inclusive of defence costs as mandated under the Legal Profession Uniform Law (WA) and associated Uniform Rules. | Law Mutual (WA), operated by the Law Society of Western Australia, manages the PI arrangements for most WA law practices. Other private insurers also offer PI, but the mandatory PI scheme for WA solicitors is administered through Law Mutual (WA). | All law practices and practicing solicitors |
| South Australia (SA) | The compulsory minimum limit is $2M per claim including claimant’s and defence costs. | The Legal Practitioners Professional Indemnity Insurance Scheme, established under Section 52 of the Legal Practitioners Act 1981 (SA). | All legal practitioners in private practice |
| Tasmania (TAS) | Approved policies must provide cover for up to $2M per claim including claimant’s costs and defence costs. | As of the 2025–2026 policy year, the insurer is CGU. | Under Section 45 of the Legal Profession Act 2007 (Tas), solicitors in TAS must be covered by the compulsory PI Scheme administered by the Law Society of Tasmania, to be granted or renew a practising certificate with the exception of those working solely in corporate or government settings. |
Professional Standards Scheme (PSS) for Solicitors
Many law practices subscribe to one of the PSS’s (also known as the Limitation of Liability Scheme) offered by their local law associations. The PSS limits their liability to the amount covered under their PI Policy, as approved under the Professional Standards Act in each state and territory. The maximum amount of damages a client can claim against a solicitor in civil liability cases depends on each law practices annual fee income, size and insurance arrangements as determined by the applicable rules in each state.
The PSS is administered by the Professional Standards Council and applies to professional associations such as the Law Society of NSW, Law Institute of Victoria, Queensland Law Society, and Law Society of WA. Schemes typically run for five years but require annual registration or exemption.
The purpose of the legislation is to ensure professionals maintain PI insurance, engage in proper risk management and adhere to professional standards, in return for which liability is limited to the amount covered by the respective PI policy.
Comparison of PSS’s for Solicitors across Australian jurisdictions
| Jurisdiction | Administered by | Liability Cap (Typical) | Duration of Scheme | Key Requirements |
| NSW | Law Society of NSW | $1.5M or $10M depending on annual fee income and number of principals | 5 years: 22nd November 2024 to 21st November 2029 (renewed annually) | Hold approved PI insurance, comply with CPD, complaints handling and risk management |
| VIC | Law Institute of Victoria (LIV) | $1.5M or $10M depending on practice size and annual fee income | 5 years: 1st July 2022 to 30th June 2027 | Hold PI insurance, CPD compliance and quality assurance |
| QLD | Queensland Law Society (QLS) | $1.5M or $10M depending on the size of the law practice and annual fee income | 5 years: 1st July 2022 to 30th June 2027 (renewed annually) | Hold PI insurance, CPD compliance and quality assurance |
| WA | Law Society of WA | $1.5M, $5M or $10M depending on the insurance policies and total annual fee income of the law practice. | 5 years: 1st July 2024 to 30 June 2029 | Hold PI insurance, CPD compliance and professional conduct standards |
| Other states/territories | Local law societies | Similar caps aligned with Professional Standards Acts | 5 years | Hold PI insurance, CPD compliance and professional conduct standards |
Who requires Solicitors Top-Up PI insurance?
- Law Firms with high-value transactions, especially those dealing with corporate, commercial or property law transactions where claims quantums may exceed the limit of primary policies.
- Practices with corporate and international clients, for example, those serving banks, multinationals or government bodies where obligations by principals/clients require firms to hold higher limits
- Firms operating in high-risk areas and with niche expertise, for example firms specialising in class actions, financial services, wills, estates, mergers and acquisition activities or intellectual property.
- Solicitors in jurisdictions with low mandatory limits which may be insufficient for some practices.
Covered professional services
Solicitors Top-Up PI insurance policies cover civil liability claims which arise from the provision of legal services, protecting law firms and individual solicitors against claims made by clients alleging breach of duty, negligence or other professional failings in the course of providing legal advice or representation.
These policies typically extend to cover all areas of practices, including:
- Conveyancing and property transactions
- Commercial and corporate law
- Family law and wills/estates
- Litigation and dispute resolution
- Employment law
- Trust and fiduciary matters.
What is not covered by the policy?
Common exclusions include:
- Known facts, circumstances and prior claims
The policy will not cover any matter, fact, circumstance or claim that has been notified, or otherwise should have been notified in a prior policy period. Please refer to our article on claims made insurance here.
- Intentional Acts
Claims which arise from deliberate wrongdoing, fraud, dishonesty or criminal activity by a solicitor or law firm are excluded under the policy which may arise during the course of providing professional services.
- Prior Conduct
The policy will not cover any conduct giving rise to claims, where that conduct happened before the retroactive date on a policy. You must ensure that the retroactive date is set at a time on or before the date in which you first started providing your services. Again, the claims made nature of the policy requires the policyholder to have high regard to the retroactive date. The retroactive date will typically be detailed in the policy schedule, or, alternatively, it may be within the policy wording or the policy endorsements.
- Contractually assumed liabilities beyond the scope of normal legal practice
Contracts generally require professional indemnity to be held in connection with the services being performed under the agreement. The obligation is sought to continue for at least 7 years after the services under the agreement cease, this obligation’s genesis being the claims made nature of the policy and the Limitations Act.The requirement by the principal for the professional to hold the cover is ultimately to transfer the promise to indemnify the principal as is often found in the agreement’s indemnity clause. The scope of the indemnity sought by the principal should, as far as practicably possible, match the indemnity conferred on the professional under its policy.Often however, principals seek wider indemnities that extend the liability of the professional. A professional may accept such liabilities contractually, but should be aware that in doing so, these assumed liabilities exist only as a result of the undertakings it makes under such agreement. Where such a liability exists solely by such undertaking their professional indemnity policy will not cover them for loss in connection with that assumed liability. On that basis it will be a commercial, uninsured risk.
- Fines, penalties, or disciplinary sanctions
Regulatory fines, penalties, or costs of disciplinary proceedings are not covered. Defence costs incurred responding to an enquiry by a regulatory body are typically not covered (such as responding to a complaint made to the Office of the Legal Services Commissioner in NSW or corresponding regulatory body in other states and territories).
- Bodily injury and property damage
Claims which arise from or in connection with bodily injury or property damage. Having such an exclusion significantly impacts the indemnity that ought to be available under a professional indemnity policy. It is critical that these exclusions are “written back” so that they do not apply if the claim arises from the covered professional services.
- Insolvency or trading debts
Losses arising from the firm’s insolvency, bankruptcy or trading debts are not covered as trading debts or losses are generally not compensatory in nature and PI policies are intended to deal with claims for compensation.
- Employment related claims
Claims brought by employees are usually excluded, for example bullying, harassment and wrongful dismissal, as these types of matters are covered under Employment Practices Liability insurance.
Claims examples
“Professionals” provide legal advice (professional services) on which third parties may rely. If those services are incorrect and the professional did not take reasonable care to ensure that the legal advice was correct, the professional may have a liability to the third party.
Some claims examples include:
- A solicitor forgets to register a lender’s charge of a property at the Land Registry, and the lender later discovers that they have no legal security over the loan, suing the solicitor for financial loss caused due to their negligence.
- A solicitor incorrectly advises a client that land is freehold when it is in fact leasehold meaning the client has paid more than the property is worth, consequently suing the solicitor for damages.
- A solicitor may overlook a covenant prohibiting commercial use of a property when the buyer intended to run a business. As the buyer cannot legally do so, the buyer may sue the solicitor for loss of use/value.
- A solicitor may be sued if they fail to file a claim within the statutory limitation period, meaning their client loses the right to pursue damages.
- A solicitor may draft a will incorrectly leading to unintended beneficiaries inheriting assets and the rightful heirs consequently suing the solicitor.
- A solicitor may overlook inheritance tax planning resulting in a large bill for the estate, with the beneficiaries claiming against the solicitors.
- A solicitor may be sued if they fail to include a crucial clause in a commercial contract, exposing the client to liability.
- A solicitor may miss significant liabilities when conducting due diligence on a company (for example environmental cleanup obligations or pending litigation) and be sued by the buyer for negligence and financial losses after discovering these liabilities post-completion.
- A solicitor may omit or mis-draft key warranty clauses in a sale agreement. The buyer may sue the solicitor due to their inability to recover losses when a warranty breach occurs.
- A solicitor who advises on share purchase when an asset purchase would have been more efficient may be sued when the client incurs a significantly higher tax bill due to the solicitor’s negligence.
- A solicitor may mis-interpret foreign law requirements in a multi-jurisdictional deal and the client may sue due to losses suffered as a result of unenforceable agreements.
For personalised advice regarding Solicitors Top-Up PI insurance and to obtain a quote, please contact a Bellrock Advisor.
