Nexa Raises Professional Indemnity Insurance to £10 Million

We’re pleased to announce that Nexa has increased its Professional Indemnity Insurance (PII) cover to £10 million, reinforcing our commitment to providing clients and consultant lawyers with the highest levels of protection and confidence.

This enhanced coverage reflects both our continued growth and our dedication to meeting the needs of the increasingly complex matters handled across our network. As more senior lawyers join Nexa and bring high-value, sophisticated work with them, it’s essential that our PII cover evolves in line with the scale of our instructions.

Raising our PII to £10 million means:

• Greater assurance for clients engaging Nexa lawyers on substantial or sensitive matters.

• Increased confidence for consultant lawyers operating within a robust, secure platform.
• A stronger competitive position in the legal services market, particularly among alternative legal providers.
• oh, and by the way, did you know we don’t request an excess as we really trust our process.

Eliot Hibbert, CEO & Founder of Nexa says “At Nexa, we’re committed to offering a modern, flexible model underpinned by professional standards you can trust. This increase in PII is another step in ensuring our platform remains one of the most secure and forward-thinking choices for lawyers and clients alike.”

If you’d like to learn more about how Nexa supports high-quality legal work within a flexible consultancy model, we’d be happy to continue the conversation.

PLUS

Legal and Regulatory Context

• Minimum cover under the SRA’s Minimum Terms and Conditions (MTC) is £3m for LLPs and companies (£2m otherwise). In addition, firms must maintain “adequate and appropriate” cover for current and past practice (SRA Indemnity Insurance Rules r.3.1). Adequacy is assessed by reference to a rational, documented assessment including client profile, matter values, likely loss, aggregation risk, claimant costs, and funds held in client account.
• PII is written on a “claims made” basis, so the policy in force when a claim is first notified responds. Reducing limits later can expose historic higher-value work.

Key Benefits of Increasing Limits from £3m to £10m

1. Enhanced client protection and regulatory defensibility

• Moving to £10m materially reduces the risk that a single large claim (damages plus claimant costs and interest) exceeds the policy limit, thereby avoiding uninsured shortfalls and potential insolvency risk.
• A higher limit supports the SRA “adequate and appropriate” requirement where the firm handles higher value transactions, holds significant client money, or faces aggregation exposure. A well-documented decision to increase limits aligns with SRA guidance that it will not “second guess” a reasonable and rational assessment.

1. Coverage headroom for claimant costs and interest

• Under MTCs, defence costs are in addition to the limit, but claimant costs and interest are within the limit of indemnity. Increasing to £10m provides buffer for:
  • Claimant’s costs, which can be substantial and sometimes exceed the damages.
  • Statutory interest accrued over long limitation periods, which can materially inflate total exposure.

1. Mitigation of aggregation risk

• Insurers may aggregate multiple related matters into a single “claim” under MTC clause 2.5. A systemic error (for example, multi-unit commercial property work or repeated advice on a standard form) can aggregate and rapidly exceed £3m. A £10m limit better mitigates this tail risk.

1. Capacity to undertake, and remain competitive for, larger mandates

• Many institutional clients (lenders, local authorities, major corporates) stipulate minimum PII limits above £3m. A £10m limit:
  • Satisfies procurement and panel requirements and reduces friction during onboarding.
  • Enables instruction on larger deals, class or portfolio mandates, and complex litigation, supporting firm growth and pricing power.

1. Resilience against increased severity trends

• Market data indicates rising claim severities due to social/economic inflation, increasing defence costs, and larger underlying transactions. Benchmarks show firms have been increasing limits in response. A higher limit provides resilience to volatility and one-off “bet-the-firm” events.

1. Strategic alignment with liability caps

• Engagement-letter liability caps cannot go below the MTC minimum and must be reasonable under UCTA/CRA tests. A higher insured limit:
  • Improves the defensibility of caps that reference insurance levels.
  • Supports commercial negotiations where counterparties resist low caps.

1. Better fit for “claims made” tail and historic work

• If limits were increased historically for a significant matter, maintaining higher limits for the limitation tail (often 6+ years) is prudent. A standing £10m limit simplifies coverage continuity across years, reducing the risk of a later claim falling into a reduced limit environment.

1. Potential insurer perception and placement benefits

• Demonstrating prudent limit selection, effective liability caps, and risk controls can positively influence underwriter perception and, over time, pricing and terms for both primary and excess layers.

Caveats and Limitations

• Higher limits do not remove the need for robust engagement terms (effective, reasonable liability caps), quality control, and matter selection.
• Excess-layer policies are not on MTC terms; exclusions (e.g., certain cyber losses) and aggregation wording must be scrutinised.
• Limit adequacy is firm-specific; periodic, documented assessments against SRA guidance and client/matter data remain essential.