Most PI claims are won or lost in the two days after the email arrives, not in the two years before it lands in court.
The reflex when a client letter or pre-action protocol arrives is to call the partner who handled the matter, ask them what happened, and put together a defensive narrative. Every step of that reflex is wrong. Files need to be preserved, privilege protected, the insurer notified, and the client communications channel narrowed to a single neutral acknowledgement — all before anyone starts building the case. This guide is the playbook for the first 48 hours after a notifiable circumstance or claim is identified. It is written from the perspective of a senior broker walking a client through their first major notification.
The first 48 hours have four objectives, in this order: preserve, protect, notify, narrow.
Preserve means securing every document in the firm’s possession that touches the matter — the working file, the email archive, the time records, the closed-matter index, any handwritten notes, any digital messaging records. The firm’s litigation hold should engage immediately on identification of the claim. Documents that are routinely destroyed under retention policies — server backups, draft documents, telephone notes — must be ring-fenced. Destruction of documents after notification, even under a previously documented retention policy, will be characterised by an opposing party as adverse spoliation.
Protect means privilege. Internal investigations conducted under threat of litigation should be conducted under legal advice privilege. Communications with the broker about how to notify are not privileged — they are insurance dealings. Communications with the appointed defence solicitor are privileged. The distinction matters because emails written in the first 48 hours often end up disclosed. Any document headed “investigation report” or “what went wrong” that is not commissioned through the defence solicitor is at risk of disclosure.
Notify means writing to the insurer the same day, or the next morning at the latest. The notification should describe the facts without making admissions of liability. It should attach the correspondence triggering it. It should ask the insurer to confirm receipt and to nominate a claims handler and panel solicitor.
Narrow means controlling who at the firm communicates with the claimant. A single point of contact, almost always the managing partner or risk lead, should acknowledge receipt of the claimant’s letter, confirm that the matter is being passed to insurers, and decline to engage further on substance until the insurer has responded. Any other partner or fee-earner who picks up the telephone to the claimant in good faith is a problem.
Every UK regulated PI wording requires written notification of claims and circumstances as soon as reasonably practicable, or in materially similar language. The Solicitors Regulation Authority Minimum Terms and Conditions of Professional Indemnity Insurance, at clause 5, require notification during the policy period. The RICS Professional Indemnity Insurance Minimum Approved Wording and the ARB-regime architects’ wordings impose equivalent obligations.
The Insurance Act 2015, section 3, requires a fair presentation of the risk at inception and renewal. Notifications made during the policy period engage cover under that policy; they do not engage a fresh disclosure obligation mid-term unless the wording specifically requires updating disclosure (which most PI wordings do not). Section 7 defines the relevant knowledge — for a body corporate, the knowledge of senior management and those responsible for arranging the insurance. Section 8 sets out the remedies for breach of fair presentation, which apply at inception and renewal, not to mid-term notifications.
The interaction with privilege is governed by the general law, not by the insurance statutes. Litigation privilege attaches to communications between the firm, its lawyers, and third parties where the dominant purpose is the conduct of actual or contemplated litigation. Once a claim or credible circumstance has been notified, litigation is reasonably in contemplation and the privilege engages on properly-structured communications. Legal advice privilege, broader in scope, attaches to communications between the firm and its lawyers for the purpose of giving or receiving legal advice. Communications with the insurer or broker are not legally privileged, though they may be commercially confidential.
The without prejudice rule protects genuine settlement communications from disclosure. It does not protect the firm’s internal investigation, its statements to the claimant before settlement discussions have started, or its responses to a pre-action protocol letter. Firms routinely confuse without prejudice with confidentiality; they are different doctrines. A letter marked “without prejudice” that is not in fact a genuine attempt at settlement enjoys no protection.
Most regulated PI wordings contain an admissions clause prohibiting the insured from making any admission of liability without the insurer’s consent. Breach of this clause is rarely a stand-alone ground for declinature once section 11 of the Insurance Act 2015 is applied, but it gives the insurer ammunition in any subsequent disagreement on settlement strategy. The first 48 hours is the window in which admissions are most likely to be made by accident — in a holding email, in a courtesy telephone call, or in an internal memo that is later disclosed.
Consider a mid-sized accountancy practice with a GBP 3,000,000 limit of indemnity. On a Friday afternoon the audit partner receives an email from a former client’s solicitor asserting that the 2023 audit failed to identify a material misstatement and that proceedings will follow unless the practice responds within 14 days.
By 6pm the same day, the managing partner has issued a litigation hold to IT and document services. The audit partner is asked to set aside the working file and stop accessing it pending the appointment of defence solicitors. The compliance partner drafts a one-paragraph acknowledgement to the claimant’s solicitor confirming the letter has been passed to insurers and asking that further correspondence be addressed to that route.
On Monday morning the practice notifies its insurer through its broker, attaching the claimant’s letter and a one-page factual chronology. The insurer acknowledges, allocates a claim handler and instructs panel solicitors by Wednesday. The internal investigation begins the following Monday under the direction of the defence solicitor, protected by legal advice privilege. No communications go to the claimant in that fortnight other than the original acknowledgement.
Five months later the claim is repudiated on causation grounds without proceedings being issued. Total defence spend: GBP 28,000. The discipline of the first 48 hours preserved the privilege over the internal investigation and prevented a single email from undermining the defence.
The first 48 hours playbook is operationalised before any claim arrives. At renewal:
Apex’s view: by far the most expensive PI claims we see are the ones where a well-meaning partner picked up the telephone in the first 24 hours and gave the claimant material that should never have been disclosed. The wording protects firms that follow the playbook; it does not rescue firms that go off-piste. We tell every client to print the four-objective sequence and pin it to the risk wall. When the email arrives, the firm executes the sequence before doing anything else — and the case stays defensible.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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