Material change mid-term: what to tell your PI insurer, and when

Reviewed by the Apex broking team · Last reviewed 2026-08-22 · Position stated as at August 2026

The two duties, separated

• Fair presentation of the risk is a statutory duty under Part 2 of the Insurance Act 2015. Section 3(1) requires the insured to make a fair presentation of the risk before a contract of insurance is entered into. It is a duty about the risk you are asking the insurer to accept.
• Notification is a contractual obligation created by your policy wording. It requires you to tell the insurer about claims made against you, and usually about circumstances that may give rise to a claim, within the time and in the manner the policy specifies. It is a duty about things that have gone wrong.

A mid-term change in your business is normally a fair presentation question. A complaint from a client is normally a notification question. Some events are both, and those are the ones that cause trouble.

Does fair presentation apply mid-term?

The general position is that there is no free-standing statutory duty to volunteer new information during the policy period. Section 3 attaches to the point at which the contract is entered into.

But section 2(2) of the Insurance Act 2015 applies Part 2 to a variation of a non-consumer insurance contract, with modifications: references to the risk are read as references to changes in the risk relevant to the proposed variation, and references to the contract of insurance are read as references to the variation itself.

So the duty does apply mid-term — but only when you ask for something to change. Increasing your limit, adding an activity, extending the territorial scope, adding a subsidiary or bringing a newly acquired team within cover are all variations, and each one attracts a fresh duty of fair presentation limited to the change being sought.

Schedule 1 to the Act sets out the remedies. For a variation, a deliberate or reckless qualifying breach allows the insurer to terminate the contract from the date of the variation and retain the premiums. For a breach that is neither deliberate nor reckless, the remedy is proportionate: the variation may be treated as never having been made, different terms may be imposed, or a claim may be reduced in proportion to the premium that would have been charged.

Where the policy itself creates a mid-term duty

Many PI wordings do more than the statute requires. Look for:

• A material change condition requiring notice of specified changes — a merger or acquisition, a change of control, entering a new discipline or territory, a substantial change in fee income, or the firm ceasing to trade.
• An acquisitions clause giving automatic cover for a new subsidiary below a size threshold, and requiring underwriting above it.
• A condition precedent attaching to either of the above. Where the clause is drafted as a condition precedent to liability, the consequence of missing it is not proportionate at all.

These are contractual, not statutory. That means the analysis starts and ends with the words on the page, and it is why a change that would be irrelevant under one wording can be fatal under another.

What counts as material

Section 7(3) of the Insurance Act 2015 sets out the test for a material circumstance: one which would influence the judgement of a prudent insurer in determining whether to take the risk and, if so, on what terms. Our wiki entry on the material circumstance covers the test itself, and the page on section 7 goes through the statutory wording; there is no point restating either here.

What is worth saying is which changes actually move an underwriter in professional indemnity practice: a shift in the mix of work rather than its volume; work in a new territory, particularly one with a different litigation culture; taking on a discipline the firm has not done before; a change in the size of the largest single engagement; the arrival of a team from elsewhere with its own claims history; and a change in the firm’s legal structure or ownership.

The notification side

Notification runs on a different clock and a different trigger. It is the more urgent of the two, because professional indemnity is written on a claims-made basis and the right to have a matter dealt with under the current policy can be lost by delay.

Rather than restate the mechanics, these are the pages that cover them:

• Notification of claim — what a notification is and what it must contain.
• Date of notification — when notice is treated as given, which is where disputes usually start.
• Circumstance notification explained and claim versus circumstance.
• Consequences of late notification.

The one point worth making here is the interaction. If a material change and a notifiable circumstance arrive together — for example, a team joins from another firm and brings a live dispute with it — they must be handled as two separate exercises. Telling the underwriter about the hire is not a notification of the dispute, and notifying the dispute is not a fair presentation of the change in the risk.

A working rule

• Nothing has changed and nothing has gone wrong: no duty until renewal.
• Something has changed and you want the policy to change too: a variation. Present the change fairly, in writing, before it is agreed.
• Something has changed and the policy has a material change condition: comply with the condition, in the manner and within the time it specifies.
• Something has gone wrong, or might have: notify. Do not wait for renewal, and do not treat a conversation with your broker as a notification unless the wording says it is.
• Both at once: do both, separately, and record which is which.

The cheapest habit in professional indemnity is writing things down at the time. Almost every dispute about disclosure and notification turns into a dispute about what was said and when.

See also

• Material circumstance — the section 7 test in the wiki
• Notification of claim — what a valid notification looks like
• Date of notification — when notice is treated as given
• Insurance Act 2015 section 7 — the statutory wording

References

• Insurance Act 2015, sections 2, 3 and 7
• Insurance Act 2015, Schedule 1 (insurer's remedies for qualifying breaches), Parts 1 and 2

Frequently asked questions

Do I have to tell my PI insurer about changes during the policy year?

There is no general statutory duty to volunteer information mid-term. Section 3 of the Insurance Act 2015 attaches the duty of fair presentation to the point at which the contract is entered into. Two things can change that: asking for a variation, which attracts a fresh duty limited to the change under section 2(2); and a material change condition in your own wording, which is contractual and must be complied with on its own terms.

Is a mid-term change the same as a notification?

No, and confusing the two is the most common mistake in this area. Disclosure concerns the risk the insurer is being asked to carry. Notification concerns a claim that has been made against you, or a circumstance that may give rise to one. They have different triggers, different deadlines and different consequences, and an event can require both.

What happens if I get a variation disclosure wrong?

Schedule 1 to the Insurance Act 2015 sets out the remedies. If the breach was deliberate or reckless the insurer may terminate the contract from the date of the variation and keep the premiums. Otherwise the remedy is proportionate: the variation may be treated as not having been made, different terms may be applied, or a claim may be reduced in proportion to the premium that would have been charged.

This page is insurance information for UK businesses, not legal advice. It is a general summary and cannot take account of your own facts, your policy wording or your regulator’s current rules; take advice before acting on it. Position stated as at August 2026.

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.