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Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →A buyer or seller who hands a property file to a Queensland law practice is relying on more than the skill of the people working on it. Behind the file sits an insurance policy the practice did not choose and cannot go without: professional indemnity insurance arranged for the whole solicitors' branch of the profession by the Queensland Law Society.
Most clients never hear of it, which is how it should be. The policy only becomes visible on the rare file where a mistake costs someone money. It still shapes ordinary conveyancing every day, because the insurer behind it publishes checklists, protocols and training that many practices build their property work around.
This guide explains how the arrangement is put together. It covers the rule that makes insurance compulsory, the insurer the Law Society uses, the cover level and the levy as they stand in the published documents, the risk material written for conveyancing, what a claim is and how one moves in general terms, and how all of this differs from the fidelity fund. It describes a system and is not advice on any particular matter.
Cover from the Law Society's 2026/27 insurance questionnaire; levy cut as reported by Proctor in May 2026; claim share from the insurer's review of the 2019/20 year, published in Proctor in September 2020.
Why a conveyancing file has insurance behind it
In Queensland, conveyancing is legal work. It is done by solicitors and law practices, and the state has no separate licence for conveyancers. That single fact decides which safety nets sit behind a property transaction: they are the ones that apply to the legal profession.
There are two of them, and they answer different questions. One deals with honest mistakes in the work. The other deals with trust money that has gone missing through dishonesty. Professional indemnity insurance is the first. It is the cover a professional holds against claims that their work fell short and caused a loss.
Related readWhat a conveyancing solicitor does, from first call to settlementThe Law Society's page on the subject puts the starting point in one line: every law practice in Queensland is required to hold professional indemnity insurance. The page ties the requirement to the Legal Profession Act 2007 and to a rule the Society has made under it, the Queensland Law Society Indemnity Rule 2005. It also notes that an earlier rule, dated 1987, came before the present one, so the idea of compulsory cover for solicitors is several decades old.
For a client, the practical meaning is simple. The question of whether a practice could meet a claim does not depend on the size of the practice or on what its owners happen to have set aside. A sole practitioner in a regional town and a large city firm are both required to stand behind their conveyancing with the same base policy.
The rule that makes cover compulsory
The Indemnity Rule 2005 is the working document. The copy published by the Law Society and read for this guide is version 37. It states that it is made under sections 231(2)(l) and 232 of the Legal Profession Act 2007, and it carries no publication date on its face.
Three provisions do most of the work. Rule 6 says the Law Society is required and authorised to take out and keep a master policy for law practices with its insurer. Rule 9 says each principal of a law practice conducting legal practice in Queensland is required to be insured in terms of that master policy. Rule 10 requires payment into a fund of an amount the rule calls the insurance levy.
Related readWho may do conveyancing in Queensland, and why it takes a law firmThe structure is worth pausing on. Practices do not each go to the market and buy their own base policy. The Law Society holds one master policy, and each practice is insured under it once the levy and any other money owing have been paid. The rule describes cover following receipt of satisfactory evidence that the practice, including its principals and any prior law practice, has paid what it owes.
Rule 8 sets out who the rule applies to, and who sits outside it. The table below summarises those provisions and the exemptions in rule 16.
| Group | Position under the rule | Where it is found |
|---|---|---|
| Incorporated legal practices | Covered by the rule | Rule 8 |
| Local legal practitioners practising as solicitors | Covered by the rule | Rule 8 |
| Solicitors working solely in-house for a corporation that is not a law practice | Outside the rule | Rule 8(2) |
| Government legal officers doing only government work | Outside the rule | Rule 8(2) |
| Members of national or interstate law practices with approved insurance | May be exempted | Rule 16 |
| Employees of community legal services with approved insurance | May be exempted | Rule 16 |
The exemptions in rule 16 do not remove the need for insurance. They recognise that some solicitors are already covered by another approved policy, for instance where a practice operates from offices in more than one state or territory. A solicitor relying on one has to satisfy the Law Society that current approved indemnity insurance is in place.
A private practice that takes on property work for the public falls squarely inside rule 8. So does every person the rule's definitions treat as an associate of that practice: a sole practitioner, a partner, a legal practitioner director of an incorporated practice, and an employee, consultant or locum. The conveyancing clerk's employer is insured for the work done on its files.
The insurer: Lexon and the master policy
The insurer named in the rule is Lexon Insurance Pte Ltd. Its own website describes it as a captive insurer providing professional indemnity insurance to members of the legal profession, and as a wholly owned subsidiary of the Queensland Law Society, with a registered office in Brisbane.
Related readChecking a Queensland conveyancing lawyer before you engage oneA captive insurer is one owned by the group whose risks it insures. Here the owner is the professional body of the people being insured, which is why the scheme's pricing decisions are announced by the Law Society's Council and not by a commercial underwriter.
The Law Society's insurance page adds some history and detail. Lexon was established in 2001 and was formerly known as QLS Insurance. The company is incorporated in Singapore, the page gives its paid-up capital as $19 million, and it describes Lexon as the claims manager for the scheme.
The master policy is renewed by insurance year. The rule refers to two of them: the 2025-2026 year, under Master Policy No. 2025, and the 2026-2027 year, under Master Policy No. 2026. It defines the 2025-2026 insurance year as running from 6pm on 30 June 2025 to 6pm on 30 June 2026, Queensland time. A conveyancing file open today therefore sits in the 2026-2027 year.
Lexon's website is mostly a working tool for practices. Its public menu lists bulletins, checklists, a section on insuring with Lexon, a section on making a claim and a booking page for risk visits. Those inner sections open only after a practitioner logs in, so the detail in them is not public. What follows in this guide comes from the documents that are: the rule, the Law Society's pages and forms, and the reports in Proctor, the Society's own publication.
How much cover a practice carries
The clearest published statement of the cover is in the Law Society's questionnaire for renewing and new practices for 2026/27, a form whose file name dates it to 4 February 2026. It describes the base cover as $2,000,000 for each and every claim, inclusive of defence costs but exclusive of any applicable excess.
Related readConveyancing fees in Queensland: fees, outlays and your rightsEach part of that phrase matters.
"Each and every claim" means the limit applies claim by claim. Proctor's May 2026 report on the scheme makes the same point from the other side: the standard cover is $2 million per claim, for an unlimited number of claims. One claim paid does not use up the cover available for the next.
"Inclusive of defence costs" means the cost of responding to the claim is counted inside the $2 million. It is not an extra amount on top.
"Exclusive of excess" means the practice bears a first slice itself. An excess is the part of a loss an insured pays before the policy responds. The questionnaire does not set out the excess amounts, and this guide does not guess at them.
A practice can buy more than the base. The questionnaire lists optional enhanced cover of $5 million or $10 million per claim, and Proctor's report describes optional top-up insurance as available through Lexon. The rule deals with the price: where a practice is given a limit of indemnity above $2,000,000 under the master policy, it pays an additional levy.
Two further features are described by Proctor as provided free of charge. The first is run-off cover, which is cover that continues after a practice has stopped trading. The rule allows the Law Society to arrange for former insureds to be covered under the master policy without paying the levy. If a payment is made on behalf of a former insured, the rule makes that former insured liable for an excess of $3,000, plus a deterrent excess where one applies. The second is innocent party protection, which Proctor lists as a retained benefit of the scheme without further description.
Related readBuying or selling without a lawyer: the DIY paper trail in QueenslandRun-off matters in property because a file does not stop mattering when a practice closes. The arrangement for former insureds is what keeps a policy behind those old files.
The levy and how it is set
The money for all this comes from the profession. Rule 10 requires each practice to pay the insurance levy, calculated under the schedules to the rule, when the Law Society requests it. Schedules 2 and 3 apply to the 2025-2026 year and Schedules 4 and 5 to the 2026-2027 year. If an amount is still unpaid 30 days after it falls due, rule 13 allows interest to be charged at the Society's discretion.
The base levy is tied to a practice's gross fee income, the total fees it earns. Schedule 2, the 2025-2026 schedule, sets six bands. In the first, for gross fee income up to $25,000, the levy is a flat $2,000. In bands two to six the levy is a percentage of fee income, on rates that run from 0.84 per cent down to 0.25 per cent. The questionnaire for 2026/27 collects fee income for the same purpose, saying the information helps ensure the levy model remains appropriate for the Queensland profession.
The current year brought a reduction. In May 2026 Proctor reported that the Law Society's Council had decided in April to cut the levy for 2026/27 by at least 15 per cent across all base levy bands. The report attributed the scheme's improved financial position in large part to the profession's focus on risk management, which had kept claims costs low for another year.
Related readOne lawyer for buyer and seller? Conflict rules in Queensland salesOn top of the base, the schedule adjusts each practice's levy up or down. Proctor's report lists the adjustments kept for 2026/27.
| Feature | Size | How it works |
|---|---|---|
| No claims discount | 7.5% | Proctor reports that more than 93% of eligible practices receive it. |
| Management review discount | 15% | For practices in the insurer's enhanced management review program. Minimum $1,000, maximum $40,000. More than 55% of practices take part. |
| Claims loading | Capped at 4% | Applied only when a practice's loss ratio exceeds 100%. The yearly loading is capped at 4% of the expected claim cost. |
Proctor, May 2026. The discounts also appear in Schedule 2 of the Indemnity Rule 2005.
The design is easy to read from the table: most eligible practices pay less than the base figure, and a loading for claims is limited by a cap.
The rule also expects practices to give the Law Society the information the levy is calculated from. Under rule 10(5), a principal who does not provide it within a reasonable time is taken to have contravened a relevant law about indemnity insurance for the purposes of section 46(2)(f) of the Act.
Where conveyancing sits among claims
Property work is the everyday business of a great many Queensland practices, and the claims figures reflect that volume. The questionnaire asks each practice to divide its fee income across areas of practice, and property takes up three of the lines: residential conveyancing, commercial conveyancing, and other property related transactions such as leases and town planning.
The most detailed public breakdown read for this guide is an older one. In September 2020 Proctor published the insurer's review of the 2019/20 financial year. It recorded 348 new matters for the year, against 327 the year before, with a total claim value of $10.6 million, which was $2.4 million lower than the previous year.
Conveyancing was described as the most frequent type of matter. It made up 26.4 per cent of files and 22.2 per cent of the cost of the portfolio. Commercial matters showed the reverse pattern: 17.0 per cent of files but 33.1 per cent of the cost.
Lexon end of financial year review for 2019/20, as at 30 June 2020, published in Proctor in September 2020. Later years were not available in public form.
Read with care, the figures say something reassuring. Conveyancing produced the largest number of files because it is the work done most often, and its share of the cost was smaller than its share of the files. The typical conveyancing matter on the insurer's books was, on those 2019/20 numbers, less costly than the typical commercial one. The figures are six years old and describe a single year, so they show a pattern and not the present position.
The risks insurers write about
An insurer owned by the profession has a direct interest in claims not happening, and much of what Lexon publishes is aimed at prevention. Its website lists checklists organised by practice area, a Conveyancing Protocol and other property tools, a Cyber Protocol, a series of checklists under the name LastCheck for transactions and file transfers, online training modules that include conveyancing and cyber security, and risk procedure packs for more than a dozen areas of practice.
The risk that gets the most space in the public material is payment redirection. The 2019/20 review describes how it works: a fraudster intercepts an email exchange, removes the warning text from the footer of a message, and sends a fake email asking for funds to be transferred to an account the fraudster controls. A property settlement, with a large sum moving on a known day, is an obvious target.
The insurer's response in that review had several parts. It named a Cyber Protocol covering how fund transfer details are verified, a LastCheck for IT systems, a client intake pack carrying an updated cyber alert, a free online cyber security course and in-house cyber workshops. It also changed the policy itself: for the 2020/21 year the review announced a new cyber deterrent excess for cyber-related losses. A deterrent excess is an extra amount a practice bears in defined circumstances, and it gives every practice a financial reason to follow the verification steps.
For a client, this explains why a practice may treat emailed bank details with caution and confirm them another way before money moves: verifying transfer details is what the insurer's protocol is about.
The second theme is workload. A risk alert published in Proctor in September 2020 pointed conveyancing practitioners to template first letters to clients and file notes, designed to manage workflow during periods of high purchase volume. Standard documents are one way of keeping a file on track when a practice is busy.
The names of the insurer's conveyancing tools are public; their contents are not. The checklists themselves sit behind the practitioner login, so this guide cannot report what they say about particular steps in a file.
Why a practice double-checks bank details
The insurer's published material describes fraudsters intercepting emails and substituting their own account details. Its Cyber Protocol covers how transfer details are verified, and a cyber deterrent excess was introduced for the 2020/21 year. A verification step belongs to that system and is no sign of doubt about a client.
What counts as a claim, and how one proceeds
The Indemnity Rule leaves the main definition of a claim to the master policy, which is not among the public documents. It does carry a definition in the schedule dealing with the management review program, and that definition gives a fair picture of what the word means in this setting. A claim is a demand for, or an assertion of a right to, compensation or damages from the insured. It is also a statement of an intention to seek compensation or damages, including at a future time or depending on a future event. And it includes the insured's own discovery of a deficiency in trust money it holds.
Two things follow. A claim does not need a court document: a letter from a client asserting a right to compensation is one. And it does not need to be certain: a stated intention to seek compensation later is enough.
From there the path runs, in general terms, as follows.
- The client raises the lossThe client tells the practice it holds the practice responsible and seeks compensation. Under the rule's definition, that is a claim.
- The insurer manages the claimThe practice is insured under the master policy. The Law Society describes Lexon as the claims manager for the scheme.
- The claim is resolvedCover runs to $2 million for each claim, defence costs included. The practice bears the applicable excess.
Several points about that outline deserve care. The client's claim is against the practice, not against the insurer. The policy is the practice's protection against liability, and the client is not a party to it. What the insurance changes for the client is the practical question of whether an established loss can be paid.
The insurance also does not decide whether the practice was at fault. Whether an error was made, whether it caused the loss and how much the loss comes to are questions of law and fact in each matter, settled by agreement or, where the parties cannot agree, by a court.
The public documents do not set out the insurer's internal steps or any timeframes for handling a claim. Those are in the master policy and in the practitioner section of the insurer's website.
How this differs from the fidelity fund
Professional indemnity insurance is often confused with the Legal Practitioners' Fidelity Guarantee Fund, and the two answer different problems. The Law Society describes the fidelity fund as a compensation fund set up under the Legal Profession Act 2007, says it is not an insurance product and states that it does not cover losses caused by negligence. It exists for dishonesty involving trust money. Indemnity insurance works the other way round: it is a policy held by the practice, and it responds to claims that the work caused a loss. A separate guide in this magazine covers trust accounts and the fidelity fund in full.
What a client can take from all this
Three points sum up the arrangement for someone about to engage a practice for a purchase or a sale.
First, the cover is not optional and not a selling point. Every private law practice doing conveyancing in Queensland is required to be insured under the same master policy, to the same base level of $2 million for each claim. A practice that carries more has chosen top-up cover of $5 million or $10 million.
Second, the scheme is run by the profession for the profession, and its results are reported in the open. The May 2026 levy cut was explained by low claims costs, and more than 93 per cent of eligible practices were reported as receiving the no claims discount. On the published figures, claims are the exception.
Third, part of what a client experiences as careful practice has the insurer's work behind it: template letters, protocols for verifying payment details, and checklists for the transaction.
The policy is written for the rare file that goes wrong. Its checklists and protocols are at work on all the others.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
