The first 30 days of a PI notification — operational playbook
The first 30 days of a PI notification set the trajectory for the whole claim. Get the notification right and defence starts on solid ground; get it wrong and cover can be prejudiced. This is the operational playbook for UK professional firms.
Day 1 — recognising the notification trigger
Standard PI wordings require notification of ‘any claim or circumstance that may give rise to a claim’. The definition of ‘circumstance’ is broad — a client complaint, a regulatory enquiry, an internal awareness of a possible error.
The test: would a reasonable person consider this could lead to a claim? If yes, notification is triggered.
What to do immediately
- Do not delay. Delay in notification can prejudice cover under Insurance Act 2015 s.7.
- Identify who owns the notification internally — typically firm risk partner or MLRO.
- Document the trigger event and time-stamp it.
- Preserve all documents — email, files, records. Do not delete.
- Do not communicate externally about the substance until legal advice is in place.
Days 2-3 — formal notification to insurer
Content of the notification
- Factual background of the matter.
- Client identity and relationship.
- The claim or circumstance itself — what has been alleged, threatened, or foreseeably could arise.
- Timeline of events.
- Any documents referenced.
- Any communication already received from the client, regulator, or opponent.
Format
Written notification via broker (or direct to insurer per wording). Broker should facilitate; the notification itself is the insured's duty. Keep dated proof of receipt.
What not to say
Do not admit liability. Do not agree to any client demand. Do not settle informally.
Days 3-7 — defence panel engagement
Insurer typically assigns a solicitors' defence panel from their approved list. Alternatives can be negotiated where firm has existing relationship with defence counsel.
First contact with defence solicitors
- Preservation of privilege — establish clear scope of legally privileged communications.
- Fact-gathering with insured — comprehensive interview of relevant personnel.
- Document review — assess the paper trail.
- Strategy assessment — likely defence vs settlement trajectory.
- Communication plan — who talks to the client, regulator, media.
Days 7-14 — internal response
Internal communications
Restricted circulation. Only those with need-to-know. Preserve privilege.
Client communications
Managed through defence counsel. Do not respond substantively directly. Standard acknowledgement of communications only.
Regulatory notifications
If SRA, ARB, RICS, ICAEW or FCA notification is required (either because the matter itself requires it or because the wording requires it), coordinate with defence counsel. Regulatory-notification failure is separate from PI-notification failure.
Reputation management
Consider PR advice for high-profile matters. Media enquiries should route through firm's PR channel with defence counsel input.
Days 14-30 — strategic decisions
- Reserve assessment — insurer's initial reserve on the claim.
- Settlement vs defend — early-stage assessment. Some matters settle early; others require full defence.
- Internal changes — any process, personnel, or systems changes prompted by the matter.
- Documentation preservation orders — formal document-hold if litigation appears likely.
- Insurer-relationship management — renewal implications become live at this point.
Common failure modes
- Late notification — the single biggest mistake. Insurer can decline cover for prejudice.
- Informal settlement without insurer consent — standard wordings require insurer consent to settle. Breach can void cover.
- Admission of liability — standard wordings prohibit. Breach can void cover.
- Failure to preserve documents — not just insurance issue; disclosure obligations at litigation.
- External communications about substance — can create additional claim exposure.