# Professional indemnity for Estonian lawyers and notaries URL: https://insurancelawestonia.ee/blog/2026-11-02-professional-indemnity-legal-professions/ Author: Dr Olavi-Jüri Luik, Partner, Head of Insurance Law, attorney at law (Advokaadibüroo WIDEN OÜ) Published: 2026-11-02 Last updated: 2026-11-06 > Compulsory PI for Estonian advocates, notaries, trustees and bailiffs: trigger, intentional loss, minimum limits and the 2025 Supreme Court ruling. In Estonia, compulsory liability insurance applies to four legal professions: advocates (attorneys), notaries, trustees in bankruptcy and bailiffs. Its purpose is to protect clients and third parties: if a legal professional breaches a professional duty and causes loss, the injured person should be compensated even if the professional's own assets are insufficient. This post is based on an article by Olavi-Jüri Luik and Karl Haavasalu published in Juridica in 2022, which mapped the problems in this area, and assesses what has changed by 2026.[^1] It is relevant for PI underwriters, MGAs and claims teams writing Estonian legal professions. ## Why liability insurance is needed An error in legal services can cause serious financial loss: a time-barred claim, a badly drafted contract, a missed deadline, misuse of bankruptcy estate assets. The loss may be many times the fee. Liability insurance protects both the injured party and the professional's personal assets. It is made compulsory where the legislator treats protection of the injured party as a public interest, as with legal services, where clients cannot themselves assess quality. ## Problem 1: what is the insured event? Under § 510 of the Law of Obligations Act (võlaõigusseadus, VÕS), a liability insurer must, in place of the policyholder, compensate damage caused to a third party as a result of an insured event occurring during the period of cover, and bear legal costs.[^2] The statute does not say which event is the insured event. Possible triggers are: - the wrongful act (*act committed*); - the occurrence of loss (*loss occurrence*); - the policyholder becoming aware of the breach or loss; - the making of a claim (*claims made*). Earlier Estonian literature took the view that under the VÕS the trigger should be the wrongful act and that a claims-made trigger should not be permitted. Other authors criticised this, and later VÕS commentaries no longer repeat it. A term requiring the act, the loss and the claim all to fall within the policy period should be regarded as unreasonably detrimental: it would force the professional to stay insured for the rest of their life. A practical problem arises on change of insurer. Many insurers writing Estonian risks cross-border use claims-made wordings, while local insurers often use act-committed triggers. A professional switching from one to the other may face a gap, depending on the direction of the switch. Where the old policy is claims-made and the new one is act-committed, an act committed during the old policy period that leads to a claim only after the switch is covered by neither: the old policy does not respond to a claim made after it expired unless it has an extended reporting period, and the new policy does not respond to an act committed before it incepted unless it gives retroactive cover. In the opposite direction, from act-committed to claims-made, the old policy continues to respond to later claims for acts committed during its period, and the new policy may also respond if its retroactive date reaches back to the act, so the risk is overlap rather than a gap; the policies then have to be compared for other-insurance clauses and the rules on multiple insurance (VÕS § 486). In every switch, the triggers, retroactive dates and reporting periods of both policies should be compared. In compulsory insurance this is particularly dangerous because the injured party bears the consequence. **Proposal:** for compulsory liability insurance, the legislator should specify the trigger, or at least require new policies to cover acts committed during the previous policy (retroactive cover) and old policies to cover later claims (an extended reporting period). ## Problem 2: intentionally caused loss The general rule is that the insurer is released where the insured event was caused intentionally (VÕS § 452(1)); in voluntary liability insurance VÕS § 513 provides the same.[^2] In compulsory liability insurance the question is whether this also applies against the injured party. Under VÕS § 521(5) the insurer may not refuse the injured party's claim on the ground that it has been released from liability towards the policyholder.[^2] The article concluded that the purpose of compulsory insurance favours compensating even intentionally caused loss to the injured party, with the insurer taking recourse against the policyholder, as in motor insurance. A second problem comes from the statute itself. Under § 48(1) point 2 of the Bar Association Act (advokatuuriseadus, AdvS), an advocate need not insure liability arising from intentional breach of professional duties.[^3] If intentional breach is not an insured risk, there is no insured event and the protection of § 521(5) does not apply. ## 2025: the Supreme Court clarifies the position The Supreme Court addressed the issue in a judgment of 15 October 2025 concerning a bankruptcy trustee's compulsory liability insurance.[^4] It held, among other things, that: - the insurer's lack of an obligation to perform where the policyholder, the insured or the beneficiary intentionally caused the insured event is a general principle of insurance; in that case the insurer could rely on the policy term, permitted by the Bankruptcy Act (pankrotiseadus, PankrS) § 64(2), under which the trustee's own intentional breach of duty was not an insured event; - VÕS § 521(5) presupposes a valid contract and an insured event; it does not extend to an event that is not an insured event at all; - where the insurance contract has been avoided (for example for fraud), third parties cannot rely on it either. The judgment brings clarity but is harsh from the injured party's perspective: if a trustee, advocate or notary causes loss intentionally, the injured party may not be compensated from insurance. **Author's view.** In the author's view the Supreme Court erred on intent in this judgment, and the article's position stands: the protective purpose of compulsory liability insurance requires that the injured party be compensated even for the insured's intentional breach, as in motor insurance (Motor Insurance Act (liikluskindlustuse seadus, LKindlS) § 8(1), § 53(1) point 1), with intent relevant only internally through the insurer's recourse against the insured.[^5] Until the case law changes, the same result requires legislation, for example a duty to compensate intentional loss with recourse, or a compensation fund. Full reasoning and the strongest counter-argument: [Direct action against liability insurers in Estonia](https://insurancelawestonia.ee/guides/direct-action-liability-insurers-estonia). ## Problem 3: sums insured Under AdvS § 48(1) point 3, the minimum sum insured for an advocate's professional insurance is EUR 63,910 per insured event.[^3] The figure has not changed since the euro was introduced (it is in substance the former one million kroons). In 2022 we considered that it did not match an advocate's real exposure; in 2026 inflation has made the problem sharper. One error in a property transaction or company acquisition can cause loss many times the minimum. Firms generally buy higher limits, but the statutory minimum determines the injured party's guaranteed protection. Minimum sums for the other legal professions (notaries, trustees, bailiffs) are set in their own statutes and have likewise needed review. ## Problem 4: supervision of the insurance obligation Compulsory insurance works only if its existence is checked. The article noted that professional bodies' duty to verify members' cover, and the consequences of failing to do so, are not clearly regulated. ## Proposals The article's proposals remain relevant in 2026: 1. **Self-regulation by professional bodies:** minimum policy requirements or common standard wording that members must use. 2. **Updating and indexing minimum sums insured.** 3. **Supervision:** a duty on the professional body to verify cover, a right to place cover at the member's cost if the member does not, and liability to the injured party if verification was omitted. 4. **A statutory definition of the insured event**, to avoid gaps in cover. 5. **Redrafting the intent provisions** in light of the Supreme Court's 2025 judgment. ## How clients can check their legal adviser's cover Clients are entitled to know whether and to what extent their advocate's, notary's or other legal professional's liability is insured. Some practical points: 1. **Ask about the limit.** In high-value transactions (property, company sale, large loan), ask whether the limit matches the risk. The statutory minimum may not suffice. 2. **Ask about the trigger.** Is the policy act-committed or claims-made? If the professional ceases practice, does cover continue for later claims? 3. **Act promptly.** On discovering loss, notify both the professional and (in compulsory insurance) the insurer without delay. In compulsory liability insurance the injured party also has a direct claim against the insurer under the VÕS provisions on compulsory liability insurance (§ 520 et seq.). 4. **Watch limitation.** Contractual claims are generally time-barred after three years, or ten years for intentional breach (General Part of the Civil Code Act (tsiviilseadustiku üldosa seadus, TsÜS) § 146(1) and (4)), but insurance claims may have their own time limits. For legal professionals, the same topic is a matter of risk management. When changing insurer, ensure continuous cover and check that the new policy covers claims arising from earlier work. ## Conclusion Compulsory liability insurance for the legal professions is an important client protection tool, but the regime has gaps. The insured event is undefined, minimum sums are outdated, and after the Supreme Court's 2025 judgment injured parties are often unprotected against intentional loss. For underwriters, trigger alignment, retroactive dates and the intent exclusion are the key points to address in Estonian PI wordings. *Based on: O.-J. Luik, K. Haavasalu, "Õigusvaldkonna ametikindlustuse probleemid Eestis", Juridica 2022/7, pp. 517–528. Rewritten for the web and updated as of November 2026.* ## Related pages - [Professional indemnity in Estonia](https://insurancelawestonia.ee/guides/professional-indemnity-estonia) - [Supreme Court: intent, exclusions and scope of cover](https://insurancelawestonia.ee/supreme-court/intent-exclusions-and-scope-of-cover) - [D&O insurance in Estonia](https://insurancelawestonia.ee/blog/2026-09-29-d-and-o-insurance-estonia-director-liability) - [Research article: professional indemnity for the legal professions](https://insurancelawestonia.ee/blog/2022-07-01-research-legal-professional-indemnity) ## References [^1]: O.-J. Luik, K. Haavasalu, "Õigusvaldkonna ametikindlustuse probleemid Eestis", [Juridica](https://www.juridica.ee/article.php?uri=2022_7_igusvaldkonna_ametikindlustuse_probleemid_eestis) 2022/7, pp. 517–528. [^2]: Law of Obligations Act (võlaõigusseadus, VÕS) § 452(1), § 510, § 513, § 521(5) (RT I, 20.06.2026, 18; in force 01.09.2026). [^3]: Bar Association Act (advokatuuriseadus, AdvS) § 48(1) points 2–3 (RT I, 30.06.2026, 3; in force 01.10.2026). [^4]: Supreme Court Civil Chamber judgment of 15.10.2025, 2-21-16822/84, paras 10, 13–15. [^5]: Motor Insurance Act (liikluskindlustuse seadus, LKindlS) § 8(1), § 53(1) point 1 (RT I, 29.06.2024, 12; in force 01.01.2025).