New Zealand Law Society - Consultation on professional indemnity insurance requirements
The New Zealand Law Society Te Kāhui Ture o Aotearoa is seeking feedback on a proposal to require compulsory professional indemnity insurance for some types of lawyers. It is also consulting on whether to increase the current minimum standards for the existing disclosure rules relating to professional indemnity insurance.
Professional Indemnity insurance (PI insurance) is a type of cover that protects lawyers and law practices against financial loss if a client (or third party) claims they suffered harm because of the lawyer’s professional services. Insurance may cover matters such as negligent acts, errors or omissions. It does not cover fraud or dishonesty by lawyers (losses due to theft by lawyers may be covered by the Lawyers Fidelity Fund).
Compulsory PI insurance is a well-established feature in most comparable legal jurisdictions, including England and Wales, Ireland, Scotland, and all Australian states.
The Report of the Independent Review into the regulation of lawyers in New Zealand identified that New Zealand is an outlier among comparative legal jurisdictions because it is not mandatory for lawyers practising here to have professional indemnity insurance. This poses a risk for consumers of legal services as well as for those lawyers who do not hold relevant insurance.
PI insurance is currently optional for practising lawyers in New Zealand but there are mandatory disclosure requirements. Under Rules 3.4 and 3.4A of the Rules of Conduct and Client Care lawyers are required to disclose PI insurance arrangements (whether the lawyer holds PI insurance that meets or exceeds minimum standards set by the Law Society or does not hold PI insurance). The purpose of this disclosure requirement is to enhance client care and consumer protection.
The New Zealand Law Society Te Kāhui Ture o Aotearoa (the Law Society) is seeking feedback on:
1. Whether to introduce compulsory PI insurance for lawyers and key implementation considerations including:
2. Whether to increase the current minimum standards for the disclosure rules relating to PI insurance, which were last reviewed in 2021.
Please note that any decision to change the minimum standards for the disclosure rules relating to PI insurance (second item above) is separate from the Law Society’s decision about whether PI insurance should be made a compulsory requirement. The minimum standards may be raised, kept the same, or changed regardless of whether PI insurance becomes a mandatory requirement.
You are invited to read the consultation document and complete the online survey to provide your feedback.
The consultation closes on 5 May 2026.