The first 30 days after a PI circumstance: a practical timeline

Before you start: what triggers the clock

Professional indemnity policies are written on a claims-made basis and respond to claims and circumstances notified during the period of insurance. The trigger is not a formal letter of claim. It is usually awareness of a circumstance that might give rise to a claim — a threshold that most wordings phrase in their own way, and one that can be crossed by an internal file review or an offhand remark from a client. The substantive tests are covered in our entries on notification of claim, date of notification and circumstance. Read those for the law; use this page for the running order.

Hours 0–2: contain, do not resolve

Stop and think before responding. The instinct to fix the problem immediately, on the phone, is the single most expensive instinct in professional practice.

Preserve everything. Suspend any automatic document or email deletion policy that touches the matter. Do not tidy the file. Do not create a new version of a document that supersedes the one in question, and do not delete drafts.

Say nothing that concedes fault. Most policies contain a condition prohibiting admissions of liability, offers or settlement without insurer consent, and breaching it can prejudice cover. A holding response — that you are looking into it and will come back promptly — is professional, honest and safe.

Tell one named person internally. A partner, director or risk lead should own the matter from this point, and the number of people speaking to the client should be exactly one.

Day 1: assemble the facts

Write a short chronology from the file: what was instructed, what was advised or produced, what changed, what the client says has gone wrong, and when the firm first became aware. Note who holds the relevant records and where.

Find the policy. You need the current schedule, the wording, the limit, the excess, and the notification clause — including where notice must be sent and in what form. Some wordings specify an address or a portal, and notice sent elsewhere may not count.

Check the period. If you are close to renewal or to the end of the period of insurance, the matter becomes urgent, because a claims-made policy that expires before notification may leave the matter uninsured under both the old and the new policy.

Days 2–3: make the notification decision

The decision is whether the facts meet the wording’s threshold for a notifiable circumstance. Where they plainly do, notify. Where it is genuinely borderline, the usual professional advice is that the risk of notifying is low and the risk of not notifying is high: a notified circumstance that never becomes a claim costs nothing but a line on a renewal form, whereas an unnotified circumstance that becomes a claim after the period ends can be uninsured entirely.

Speak to your broker before writing anything. A broker who places PI daily can tell you what the specific wording requires and how this insurer expects circumstances to be presented, and can make the notification on your behalf.

If a decision is taken not to notify, record the reasoning and the date, and diarise a review. An undocumented decision not to notify is very difficult to defend later.

Days 3–7: notify properly

A weak notification is nearly as dangerous as a late one. Include the identity of the client and the matter, the work involved, what has or may have gone wrong, when the firm became aware, the potential quantum or a range if quantum is unknown, the people involved, and a clear statement that this is a notification of a circumstance under the policy.

Send it by the route the policy specifies, keep the proof of despatch, and record the date and time. Where the wording contains a deeming provision about when notice is treated as given, the evidenced date is what protects you.

Where several related matters may arise from the same root cause, consider notifying the root cause rather than one instance. How they will be treated afterwards is governed by the aggregation clause, and by whether your limit is written on an each and every claim basis.

Week 2: cooperation and communications

Expect an acknowledgement and, on anything substantial, a request for the file and a call with a claims handler or panel solicitor. The cooperation clause obliges you to assist, and prompt, organised cooperation genuinely improves outcomes.

If a reservation of rights arrives, read it clause by clause and ask for particulars if it is generic. Our page on coverage disputes sets out what that letter means and what follows.

Keep the client relationship professional. You can continue to act, continue to communicate, and be constructive about resolving the underlying problem, provided you are not admitting liability or agreeing to bear a cost. Where continuing to act creates a conflict, take advice on whether you should.

Weeks 3–4: stabilise

Review whether any other files carry the same issue. If the cause is systemic — a template, an assumption, a calculation, a supplier — the exposure is wider than one client, and the insurer needs to know.

Fix the process, and record that you have. Insurers respond well at renewal to a firm that identified a weakness and closed it. Then prepare for renewal disclosure: a notified circumstance is material information and must be presented fairly, as set out in fair presentation.

Things that go wrong in the first month

Telling the client “we will sort it out” and meaning it financially. Issuing a credit note or waiving fees as a goodwill gesture, which can be treated as an admission or an unapproved payment. Instructing your own solicitor and running up costs the insurer has not agreed to fund. Waiting for the client to make a formal claim before notifying. Notifying with three lines of detail. And letting the renewal date pass with the matter still unnotified.

Frequently asked questions

When exactly do we have to notify a PI circumstance?

As soon as practicable after becoming aware of it, and in any event within the period of insurance. Most wordings phrase the trigger as awareness of a circumstance that may give rise to a claim, so the clock can start well before any letter of claim. The precise wording governs, which is why the notification clause should be read at the outset rather than assumed.

Should we notify if we are not sure it will become a claim?

Notifying a borderline circumstance is generally low cost: it will appear on renewal disclosure and may affect terms, but the policy that was in force when you notified is the one that answers. Failing to notify and then facing a claim after the period has expired can leave the matter uninsured. Discuss the specific facts with your broker before deciding.

Can we tell the client we have notified our insurers?

There is usually no obligation to volunteer it, and it can change the dynamic of the conversation. What matters is that you do not admit liability, offer to pay, or agree a settlement without insurer consent. Keep communications factual, keep one person handling them, and take advice if you are unsure what you can say.

What if we only realise at renewal that we should have notified?

Raise it immediately with your broker rather than allowing the renewal to complete. A circumstance known before inception of the new policy is normally excluded under it, so the question of which period responds needs resolving before cover changes. It is also material information that has to be presented fairly at renewal.

This page is general insurance information about how UK professional indemnity policies are commonly structured. It is not legal advice, and it is not a statement of what any particular policy covers. If a claim, a circumstance or a contract term is in issue, read your own wording and take advice on your own facts.

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