Professional Indemnity Insurance

All practices regulated by the CLC must, as a condition of being licensed, have in place professional indemnity insurance (PII) to indemnify them for any civil liability incurred arising out of regulated services provided. The CLC runs a Participating Insurers Agreement and CLC regulated practices can seek cover from any insurer that is part of this scheme. This arrangement was put in place in June 2016. Among other things, it sets out a minimum level of cover of £2 million for each and every claim. It also ensures six years run-off cover at no additional cost when a practice closes with cover of £2 million in aggregate.

The minimum terms and conditions were revised in 2022 following extensive consultation. The current minimum Terms and Conditions, Participating Insurers Agreement, CLC Framework, Code and Guidance are linked below.

Excesses

The following excerpt from the Minimum Terms and Conditions sets out the formula for calculating maximum excesses. These are maximum levels and not fixed levels of excess.  An excess may be set lower than the maximum produced by the formula.

Excess shall be in an amount not exceeding £3,500 or the sum produced by the following formula if that is greater:

(i) 5% of Fees on Fees below £200,001; plus

(ii) 3% of Fees on Fees between £200,001 and £500,000; plus

(ii) 2% of Fees on Fees between £500,001 and £1,000,000; plus

(iii) 1% of Fees on Fees above £1,000,001.

The Excess may be in an amount exceeding the sum produced by the formula set out in clause 1.15.1 above if (and only if) the CLC provides written approval of such higher amount.

Practices will always need to ensure that they would be able to make excess payments in the event of a claim or multiple claims. 

Illustrative calculations

A practice with fees of £180,000 would have a maximum excess of £9,000.

That is calculated as follows: £180,000 x 0.05 = £9,000

A practice with fees of £750,000 would have a maximum excess of £24,000.

That is calculated as follows:

Fees tranche 1: £200,000 x 0.05 = £10,000 Plus

Fees tranche 2: £300,000 x 0.03 = £9,000 Plus

Fees tranche 3: £250,000 x 0.02 = £5,000

Background documents

Below you can read and download the relevant policies and documents. These were amended in June 2022 following extended consultation.

CLC Professional Indemnity Insurance Minimum Terms and Conditions

Participating Insurers Agreement

CLC Professional Indemnity Insurance Framework

CLC Professional Indemnity Insurance Code and Guidance