Claims-made vs occurrence: how professional indemnity insurance responds

Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05

If you are researching professional indemnity cover, the single most important thing to understand is the trigger — the event that decides which policy pays. Get this wrong and you can have paid premiums for years and still find yourself uninsured for a claim. This guide explains the two triggers, why UK PI overwhelmingly uses one of them, and the two features that flow directly from that choice: the retroactive date and run-off cover.

The two triggers, plainly

Claims-made. The policy responds to claims that are first made against you (and notified to insurers) during the period of insurance — regardless of when the work or alleged mistake actually took place, provided it falls after any retroactive date. What matters is the date the claim lands, not the date of the work.

Occurrence (or “losses occurring”). The policy responds to events, injuries or damage that occur during the period of insurance, regardless of when the claim is eventually brought. What matters is the date of the incident, even if the claim arrives years later.

Why UK PI is almost always claims-made

Professional negligence has a “long tail”. A design flaw, a piece of flawed advice or a missed deadline may not surface as a loss for years. If PI were written on an occurrence basis, an insurer would be committing to a period whose true cost could not be known for a decade or more, which makes it very hard to price and reserve for.

The claims-made model solves this. Each year’s policy deals with the claims that actually arrive that year, so the risk is contained within a defined period. That is why PI — along with directors’ and officers’ (D&O) cover and most financial lines — is written this way in the UK market. It is not a quirk of one insurer; it is the market standard. By contrast, public liability and employers’ liability are typically occurrence-based, which is one reason people who assume all insurance works the same way get caught out.

The practical consequence: with claims-made PI you must have a live policy in force at the moment a claim is made. A policy that expired last year will not pay for a claim made this year, even if the underlying work was done while that old policy was running. This is why continuity matters and why letting cover lapse — even briefly — is dangerous.

The retroactive date: how far back your cover reaches

Because a claims-made policy responds by reference to the date of the claim, it needs a separate control on how far back the covered work can go. That control is the retroactive date.

The retroactive date is the earliest date of work that the policy will cover. Any negligent act, error or omission before that date is excluded, even if the claim is made during the current period. A firm that has held continuous PI since it started trading will usually have a retroactive date matching its start date — sometimes described as “unlimited” or “full” retroactive cover — meaning all its past work is picked up.

Problems arise when the retroactive date is later than it should be. If you switch insurers and the new policy imposes a retroactive date of, say, this year, your earlier work is no longer covered by anyone: the old policy has expired and cannot respond to a new claim, and the new policy excludes the old work. Checking that the retroactive date is preserved on renewal or when you move insurer is one of the most valuable things a broker does for you.

Ask us to check the retroactive date on your current PI →

Run-off cover: protecting yourself after you stop

The other feature that follows from the claims-made model is run-off cover. Because you need a live policy when a claim is made, what happens when you stop trading, retire, sell the business, or simply stop buying PI? A claim relating to your past work could still arrive — and there would be no policy to meet it.

Run-off cover is a policy that continues to respond to claims made after you have ceased the professional activity, in respect of work done before you stopped. It carries no new work; it simply keeps the door open for claims about your past advice. Because professional negligence claims can take years to emerge, run-off is typically maintained for several years after you stop.

For some regulated professions this is not optional. The Solicitors Regulation Authority’s Minimum Terms and Conditions require solicitors’ firms that close to obtain run-off cover, and RICS-regulated surveying firms are likewise required to arrange run-off when they cease. Even where no regulator mandates it, run-off is usually the responsible choice — a claim that lands two years after you retire is exactly the scenario run-off exists for.

Notification: the duty that makes claims-made work

Claims-made policies also respond to circumstances — matters that have not yet become a formal claim but that you are aware could give rise to one. Most PI wordings require you to notify insurers of such circumstances as soon as you become aware of them during the period. Do that, and any resulting claim is treated as attaching to the policy in force when you notified, even if the claim itself arrives after that policy has ended.

This is powerful, but it cuts both ways. If you sit on a known problem and only report it after renewal, you risk a coverage dispute. And under the Insurance Act 2015 you owe a duty of fair presentation of the risk when you take out or renew cover — broadly, disclosing what you know or ought to know. Being straight with your insurer at renewal, and reporting circumstances promptly, is what keeps a claims-made policy dependable.

What this means when you buy PI

• Assume your PI is claims-made — check the schedule confirms it.
• Confirm the retroactive date reaches back to cover all the work you could be sued over, and that it is preserved every renewal.
• Never let cover lapse; a gap can leave past work uninsured.
• Notify circumstances and claims promptly, in line with the wording.
• Plan for run-off before you retire, sell or close — and check whether your regulator requires it.
• Choose a limit of indemnity (commonly £1m, £2m or £5m as generic options) that reflects your contracts and exposure.

Common questions

Is professional indemnity ever written on an occurrence basis?
Very rarely in the UK. The overwhelming market standard for PI is claims-made. If you are offered something described as occurrence-based professional cover, read it carefully and ask your broker exactly what triggers it before relying on it.

What happens to my old claims if I switch insurers?
Your previous policy will not respond to a claim made after it has expired. The new insurer picks up claims made during their period, but only for work after the retroactive date they set. So the key is to ensure the new policy’s retroactive date matches your original one, giving continuous cover across the switch.

How long should run-off cover last?
Long enough to cover the period in which a claim could realistically still be brought. That depends on your profession and any regulatory rules — some regulators specify a minimum run-off period. Many professionals maintain it for several years after ceasing. A broker can advise on the right duration for your situation.

Larger or more complex risk? Speak directly to a director — call 0117 325 0027 or email info@apexinsurancebrokers.co.uk.

Understanding claims-made cover is not academic. The retroactive date and run-off are the two details most often overlooked at renewal, and they are precisely the details that decide whether a claim is paid. If you are unsure how your current PI responds, it is worth a five-minute check.

Talk to Apex about your professional indemnity →

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for reading your policy wording.