A contract requires a higher PI limit — what now?

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-10

It is a familiar sequence. A tender lands, or a framework agreement arrives for signature, and buried in the insurance schedule is a professional indemnity requirement above the limit your firm currently carries — £5m where you hold £2m, £10m where you hold £5m. The commercial team wants to sign this week. The question for the partners is not simply “can we get the limit?” — almost always you can — but how to get it, at what structure, for how long, and whether the requirement itself deserves a push-back before anyone commits.

What exactly is the contract asking for?

Read the clause before you go near the market, because the same headline figure can mean very different things. The first distinction is the basis of the limit. A requirement for “£5m any one claim” is materially more demanding than “£5m in the aggregate”, and if your current policy is written on an aggregate basis you may fail the requirement even at the right number. Some clauses accept an aggregate limit with reinstatements; many are silent, which is an invitation to seek clarification rather than to assume. We cover the mechanics in detail in any one claim vs aggregate PI.

Then look at the other moving parts, which drive both cost and feasibility more than the headline number:

• Duration of the obligation. Many contracts require the limit to be maintained for six or twelve years after completion, broadly tracking the limitation periods for simple contracts and deeds. That converts a one-off uplift into a decade-long commitment you will carry through every future renewal — and through any run-off period if the firm later closes or merges.
• Scope wording. Phrases such as “in respect of each and every claim arising out of the services” or requirements that cover be on “customary terms with reputable insurers” are usually workable; requirements for specific endorsements, low excesses or unusual extensions may not match standard market wordings and should be checked against your actual policy, not assumed.
• Evidence obligations. Most counterparties will accept a broker’s letter or confirmation of insurance; a demand to see the full policy, or for the client to be notified of changes in cover, needs handling with care.
• Related requirements. Collateral warranties, step-in rights and third-party reliance provisions travel with insurance clauses and affect how insurers view the risk.

Only once you know precisely what is being demanded can you decide how to meet it — or whether to.

What are the routes to a higher limit?

Increase the primary policy. The simplest route: your existing insurer raises the limit on the current policy, mid-term or at renewal. It keeps one insurer, one wording and one claims relationship, and for modest uplifts it is often the cleanest answer. The constraint is appetite: every insurer has a maximum line they will write on a given risk, and beyond a certain point — commonly somewhere in the low millions for smaller firms, higher for established practices — the primary insurer will not go further alone, or will price the top portion unattractively.

Add an excess layer. This is how most substantial limits are actually built. A separate policy sits above your primary and responds once the primary limit is exhausted, typically written on a follow-form basis so that it tracks the primary wording. The excess insurer can be a different carrier entirely, which opens up capacity your primary insurer cannot or will not provide, and because the layer only pays after the first policy is spent, the cost per million of cover generally falls as you move up the tower. For a firm holding £2m or £5m and needing £10m, a layered structure is usually quicker and more economical than asking one insurer to write the whole amount. The structural detail — follow form, exhaustion, drop-down — is covered in our guide to excess layer PI insurance.

Single-project cover. In some sectors — construction and infrastructure most visibly — it is possible to buy PI dedicated to one project, with its own limit ring-fenced from the rest of the practice. Where it exists it solves the “why should every client benefit from a limit one client demanded” problem neatly, and it can be written for the project’s full duration plus a defects period. But availability in the general market is limited, underwriting is slower and more information-hungry than an annual uplift, and it suits large, long-duration engagements rather than a routine appointment. Treat it as an option to explore for genuinely exceptional projects, not the default.

Negotiate the requirement. Often overlooked, and often the best answer — dealt with below.

How quickly can an uplift be arranged?

Faster than most firms expect, provided the file is in order. A mid-term increase with your existing insurer can frequently be agreed within days: the insurer already knows the risk, and the underwriting question is whether anything material has changed since inception. An excess layer above an existing primary is also quick where the risk is clean — excess underwriters lean on the primary insurer’s assessment and the follow-form structure keeps documentation light. Realistic expectations: days for a straightforward uplift on a clean risk; a week or two where a new excess insurer is being introduced; longer where there are open claims, notified circumstances, or the firm’s work profile has shifted since the last renewal.

Two things slow the process down. The first is claims activity: an insurer asked for more limit while a significant claim or circumstance is open will look hard at why, and may decline mid-term movement altogether. The second is timing against renewal — some insurers prefer to deal with limit changes at renewal rather than mid-term, particularly large ones, because it lets them re-underwrite the whole account. Neither is fatal, but both argue for starting the conversation the day the tender arrives, not the day the contract is due back.

Buy for one contract, or move the whole programme up?

An annual PI policy cannot be ring-fenced. If you increase your primary or add an excess layer, the higher limit applies to your whole book of work — every client, every engagement — not just the contract that prompted it. That has two consequences worth weighing.

The first is that the uplift is not wasted spend on one demanding client. PI is written on a claims-made basis: the policy that responds to a claim is the one in force when the claim is made, not when the work was done. A higher limit bought today therefore typically protects claims arising from your historic work as well, subject to any retroactive date and to the usual exclusion of claims and circumstances known before inception. For a firm whose fee income, project values or reliance exposure have grown, a contract-driven uplift is often just the prompt for an increase that was due anyway.

The second consequence cuts the other way: the claims-made basis makes it unwise to bounce the limit up and back down. If you hold £10m for the two years a contract runs and then revert to £2m, a claim from that contract arriving in year four meets the £2m policy then in force — and, quite apart from the insurance position, dropping below a limit you contracted to maintain for six or twelve years is a breach in its own right. The honest framing is this: an uplift for a long-tail obligation is a decision about your programme for the next decade, and should be priced and planned as such. If a single exceptional project genuinely should not reshape the whole programme, that is when single-project cover, where obtainable, earns its keep.

Can the requirement be negotiated?

Frequently, yes — and sophisticated counterparties expect the conversation. Insurance schedules in procurement documents are often standard-form figures set for the largest suppliers on the framework, not a considered assessment of your engagement. Sensible angles include: proportionality to the contract value and the realistic worst-case loss flowing from your services; substituting an aggregate-with-reinstatement basis where any-one-claim capacity is disproportionate; shortening the maintenance period; accepting a “commercially reasonable rates and terms” qualification so that a future hard market does not put you in automatic breach; and pairing a lower limit with a negotiated cap on liability, which addresses the client’s real concern — recoverability — more directly than a big limit does. A broker’s letter explaining what your current programme covers, and what the market realistically offers a firm of your profile, is often the piece of evidence that moves a procurement team. None of this is guaranteed to succeed, but the cost of asking is a fortnight’s correspondence; the cost of not asking can be a ten-year premium commitment.

Why is “sign now, insure later” such a trap?

Because the moment you sign, the insurance clause is a binding obligation whose performance depends on a market you do not control. If capacity for your profession tightens, if an insurer withdraws, or if a claim lands before you complete the uplift, you may find the promised limit unavailable or available only on terms that make the contract uneconomic — and you are in breach either way, potentially with an uninsured contractual exposure sitting behind it. Proposal forms commonly ask about contractual commitments to maintain cover, so the obligation follows you into every future negotiation with insurers. There is also a subtler point: some PI wordings restrict or exclude liability assumed under contract beyond what the law would otherwise impose, so an insurance schedule signed unseen can create obligations the policy itself does not fully back. The disciplined sequence is unglamorous but non-negotiable: obtain terms first, hold them open, then sign. Quotes can usually be secured and held while the contract is finalised, so insuring first rarely costs you the deal — it just changes who carries the risk during the gap.

What will insurers want to see?

For a mid-term uplift or new excess layer on a clean risk, the pack is short: current policy schedule and wording, an updated fee split by activity, confirmation of claims and circumstances, and the contract clause driving the request — underwriters price differently, and sometimes better, when they can see the specific obligation rather than an unexplained appetite for limit. For larger towers or single-project cover, expect fuller proposal information: project details, contract values, reliance and warranty obligations, and the firm’s risk management around the engagement. Presenting this well, once, to the right markets is most of the difference between an uplift agreed in days and one that drags past your signature deadline.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This article is general information, not advice on a specific policy.