Aggregate limit reinstatements — UK PI

Aggregate limit reinstatements top up the annual PI limit after a claim erodes it. Available at cost from most insurers, they matter most for firms with high single-claim exposure.

How aggregate limits work

PI is usually written on an aggregate basis — a single annual limit covers all claims in the year.

When a claim is paid, the aggregate limit is reduced by the payment.

Once the aggregate is exhausted, no more cover is available until renewal.

For firms with multiple potential claims, aggregate erosion is a real business-continuity risk.

What reinstatement offers

• Restore the aggregate limit to its original level after a claim.
• Available at cost — typically a stated percentage of the original premium per reinstatement.
• Some policies offer 'automatic reinstatement' at no extra cost (limited number of times).
• Number of reinstatements can be stated in the wording (one, two, unlimited).

When reinstatement matters

Firms with high aggregate limits and multiple engagements simultaneously.

Sectors with clustered claim potential (multiple clients affected by similar advice).

Firms with regulatory minimum aggregate but real risk of exceeding it.

M&A or corporate finance advisers with concentrated single-deal exposure.

Cost and structure

1. Automatic reinstatement (limited count): often built in at no extra cost.
2. Purchased reinstatement: typically 50-100% of original premium per reinstatement.
3. Sub-limit reinstatement: reinstating specific sub-limits (e.g., cyber) is available.
4. Aggregate excess reinstatements: sometimes offered on layered programmes.
5. Broker discussion at placement or mid-term when material claim occurs.

Frequently asked

Related

• Aggregate limit vs each-and-every claim PI
• Aggregation clauses by regulator
• PI defence-cost cap in PI insurance