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Professional indemnity explained
A gap in PI cover is a period when no professional indemnity policy was in force. It matters because claims-made policies only respond to claims made while a policy is live.
Part of: Professional indemnity insurance
In short
Professional indemnity cover usually cannot be backdated to pick up claims made during a gap, because PI is written on a claims-made basis and there was no policy in force. What insurers can sometimes do is issue a new policy with a retroactive date before the gap, so future claims about past work are covered. Anything you knew about will usually be excluded, and you must disclose it under the Insurance Act 2015. Regulated professions may face extra rules. Act quickly, gather old schedules, disclose candidly and ask for the retroactive date you need.
A gap in professional indemnity cover cannot usually be backdated in the sense of buying cover today for claims made during the gap. If a claim was made against you while you had no policy, there is normally nothing to respond to it.
What can often be done is to restore cover for past work going forward. A new claims-made policy can, if the insurer agrees, carry a retroactive date that reaches back before the gap, so claims made from now on about earlier work are covered. That is subject to what you disclose, and anything you already knew about will usually be excluded.
The sooner you act, the more of that continuity you are likely to keep.
PI in the UK is usually written on a claims-made basis. Two dates decide whether a claim is covered:
| Date | What it does | Effect of a gap |
|---|---|---|
| Date the claim is made | Must fall inside the period of insurance | Claims made during the gap have no policy to attach to |
| Retroactive date | Work done before it is not covered | A new insurer may set a fresh retroactive date, leaving earlier work uncovered |
| Date you first knew of a problem | Known matters are usually excluded from new policies | Anything you learned of during the gap is likely to be excluded |
So a gap creates two problems. Claims made during the gap are uninsured. And when you buy again, the new policy may only cover work from its own start date unless the insurer agrees to cover prior acts.
Insurance covers uncertain future events. An insurer asked to backdate cover is being asked to take on a period that has already happened, when you may know of a problem it does not. That is why:
Some insurers will agree a retroactive date before the gap if you can show a continuous history of cover, a clean declaration and a short, explained lapse. That is a matter for the insurer's judgement, not a right.
Where PI is compulsory, a gap can also be a regulatory breach. Two examples:
If you are regulated and have a gap, speak to your broker and check your regulator's rules on reporting it.
These examples are illustrative only.
A consultant's direct debit fails and the policy lapses for five weeks. Nothing happened in that time. The broker approaches the same insurer, which reinstates cover with the original retroactive date after a no-known-claims declaration.
A designer lets cover lapse for a year. During that year a client complains. A new insurer offers cover with a retroactive date before the gap but excludes the complaint as a known circumstance. Other past work is protected; that matter is not.
A surveyor returns after three years without cover. The insurer will only set the retroactive date at the new policy's start, so earlier work stays uninsured unless separate run-off can be found.
Not every gap is a missed payment. Continuity is commonly lost in these situations:
In each case the fix is the same: decide in advance which work you need protected, and make sure some policy will be in force, with the right retroactive date, when a claim about that work could be made.
Late claims are a real risk: under the Limitation Act 1980, section 14A, some negligence claims can be brought up to three years from when the claimant learns of the damage, if later than six years from accrual, subject to a 15-year longstop. If you have been declined or referred, a broker can approach specialist markets.
Apex arranges PI for professionals with a gap in cover; a broker reads every enquiry.
It can, even without a day uninsured. If the new insurer sets a retroactive date at the start of its policy, earlier work is no longer covered. Ask for your existing retroactive date to be carried over and check it on the new schedule before the old policy ends.
Not in the sense of covering claims already made during a gap. You can often buy a new policy whose retroactive date reaches back before the gap, so future claims about earlier work are covered, subject to the insurer agreeing and to anything you already knew about being excluded.
The retroactive date is the earliest date of work a claims-made policy will cover. Work done before that date is excluded, even if the claim arrives while the policy is in force. Keeping the same retroactive date across renewals and insurer changes is what protects your past work.
Usually not. New policies commonly exclude claims and circumstances you knew about before cover started, and you must disclose them under the duty of fair presentation. Other past work may still be covered if the retroactive date reaches back far enough.
Contact your broker or insurer straight away. A short, unintended lapse is often easier to resolve, sometimes by reinstatement with the original retroactive date. Tell them honestly whether anything has happened that might lead to a claim.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Get a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
