The legal answer is no in most cases; the market answer is “we will try”, and the gap between the two is where most late-notification claims are won or lost.
Late notification is the second most common ground on which UK PI insurers attempt to decline cover. The classic scenario is familiar to every claims-handling broker: a circumstance was known to the firm in policy year one, was not notified, only became a hard claim in policy year three, and the year-three insurer points to the prior knowledge while the year-one insurer points to the absent notification. The Insurance Act 2015 — and section 11 in particular — substantially recalibrated the legal landscape. The market has not fully caught up. This guide explains the legal position, the commercial reality, and how to operate the section 11 argument when it matters.
Late notification arguments arise in two forms. The first form is a breach of a condition precedent to liability — the policy says notification must be given as soon as reasonably practicable, the insured did not give it as soon as reasonably practicable, and the insurer says cover is lost for that reason alone. The second form is a more subtle non-disclosure argument: the circumstance was known at the most recent renewal, was material, and should have been disclosed under the Insurance Act 2015 section 3.
Both arguments are real. Both are often overstated by the insurer’s claims handler. The legal position, properly applied, gives the insured more room than the initial decline letter suggests.
For condition precedent arguments, section 11 of the Insurance Act 2015 is the relevant provision. It applies to terms — including notification conditions — that are not specifically about losses of the particular kind that occurred. Where non-compliance with such a term could not have increased the risk of the loss that actually occurred, the insurer cannot rely on it to decline. In practical English: if late notification did not actually prejudice the insurer’s position, late notification cannot be used to escape the claim.
For non-disclosure arguments at renewal, sections 3 and 8 apply. Section 8 introduces proportionate remedies. Avoidance is available only for deliberate or reckless breaches. Non-deliberate breaches give the insurer the remedy it would have applied if the disclosure had been made — typically additional premium, a higher excess, or an exclusion. The all-or-nothing remedy of pre-2015 law is gone.
In practice, this means a claims handler’s “we are declining for late notification” letter is rarely the end of the conversation. It is often the start of one.
The Solicitors Regulation Authority Minimum Terms and Conditions of Professional Indemnity Insurance, at clause 4, prohibit qualifying insurers of solicitors from declining cover for breach of notification conditions other than where the failure was dishonest or reckless. The MTC effectively codifies the section 11 protection for solicitors and goes further in restricting the insurer’s grounds for repudiation. Where a qualifying insurer purports to decline on late notification alone, the MTC override applies.
RICS, ARB and ICAEW-regulated wordings do not contain equivalent prescriptive protection. The insured’s protection in those sectors comes from section 11 itself, the proportionate remedies regime in section 8, and the general law on construction of conditions precedent. Strict notification clauses must be construed contra proferentem against the insurer, and the courts will not lightly find that a condition is a condition precedent unless the wording is unambiguous.
The interaction with the duty of fair presentation at renewal is where many late-notification cases actually turn. A firm that knew about a circumstance but did not notify it during the relevant policy year, then renewed with the same insurer without disclosing it, is potentially exposed under both regimes: late notification under the expiring policy, and non-disclosure at renewal. The section 11 argument cuts down the late notification point. The section 8 proportionate remedies analysis cuts down the non-disclosure point. The combination of the two is usually enough to put the insurer back on the front foot.
Where the firm has changed insurer, the analysis is harder. The new insurer can argue that the circumstance was a known matter not disclosed at inception and that any claim arising from it is excluded from cover. The prior insurer can argue late notification. The section 11 argument runs against the prior insurer but not against the new insurer, because the new insurer’s argument is not about a notification term — it is about the scope of cover. A careful broker will press both insurers and look for a mid-ground commercial settlement before the legal arguments crystallise.
Consider a surveying practice with a GBP 2,000,000 limit. In April 2024, a junior surveyor flags to a director that a valuation prepared in 2022 may have misapplied the comparable evidence. The director files the note, decides “we’ll wait and see”, and does not notify the insurer. The firm renews in October 2024 without disclosing the matter on the proposal form. In March 2026, a formal letter of claim arrives for GBP 600,000.
The firm notifies in March 2026 under the 2025/26 policy. The insurer (the same insurer that wrote the 2023/24 and 2024/25 policies) declines on the basis that the circumstance was known in 2024 and was not disclosed at the 2024 renewal. The decline letter cites section 3 of the Insurance Act 2015 and asserts that the non-disclosure was reckless.
The firm engages coverage counsel. The argument advanced is twofold. First, the section 11 argument: the late notification could not have prejudiced the insurer because the insurer wrote the risk in 2024/25 and continues to write it; there is no different insurer to which the claim would have been notified. Second, the section 8 argument: if there was non-disclosure, it was not deliberate or reckless — the director made a judgement call and recorded it contemporaneously. The remedy is what the insurer would have done with the disclosure, which on the underwriter’s own evidence would have been an additional GBP 5,000 premium and a GBP 50,000 specific excess on this matter.
The insurer settles the coverage dispute on the basis of an additional excess of GBP 50,000. The claim itself settles for GBP 280,000. Net cost to the firm: GBP 50,000 in addition to the standard deductible. The decline letter, taken at face value, would have cost GBP 280,000.
Late notification risk is managed at renewal as much as during a claim:
Apex’s view: the market still treats late notification as a binary failure even though section 11 of the Insurance Act 2015 should be doing more work for the insured. We have seen insurers concede the point once it is raised properly, with coverage counsel, by reference to the actual prejudice test. If your broker is not raising it, raise it yourself. The decline letter is not a verdict; it is an opening bid. The firms that pay for a coverage opinion in week two of a late-notification dispute almost always come out ahead of the firms that fold in week three.
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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