Apex Insurance Brokers

Professional Indemnity Claims Handbook

A practical guide for Apex clients on recognising, notifying, managing and learning from professional indemnity (PI) circumstances and claims.

Foreword from Apex

A professional indemnity claim — or even the suggestion of one — is one of the most uncomfortable experiences a professional services firm will face. The first hours and days matter. The decisions you make in those hours often determine whether a difficult letter becomes a managed insurance matter, or whether it becomes a coverage dispute on top of a liability dispute.

This handbook exists for one reason: to make sure that when something goes wrong, our clients respond in a way that protects (a) the client whose work has caused the concern, (b) the firm’s reputation, and (c) the insurance cover that you have paid for. None of those three are automatic. All three can be lost by careless first steps.

We have written this handbook in plain English. We have avoided jargon where we can, and explained it where we cannot. We have not promised service levels we cannot guarantee — your insurer’s panel solicitors will make decisions on conduct of the defence, not Apex. What we can do, and what this handbook describes, is help you organise your response so that you give the insurer (and their panel) the best possible material to work with.

This is the master edition. It is sector-neutral. We publish separate addenda for solicitors, accountants, architects, surveyors, IFAs, IT professionals and engineers — each picking up the regulator-specific notification rules and the typical claim patterns we see in that sector. Please read the master handbook first, then your sector addendum.

A final word: nothing in this handbook is legal advice. It is a guide to insurance process, written by an insurance broker. Where legal advice is needed, we will arrange it via the insurer’s panel; where regulatory advice is needed, you will need your own compliance counsel. We are happy to introduce you to specialists if you do not already have a relationship.

Read it once. Keep it where your senior team can find it. We hope you never need it.

— Matt Bartlett, Director, Apex Insurance Brokers Ltd

How to use this handbook

This handbook is organised around the lifecycle of a PI matter, from the first warning sign to the post-claim renewal. You can read it cover to cover (recommended, once) or use the chapter index as a reference when something happens.

If you have just been told something has gone wrong and you need to act now: turn to Chapter 2: The 24-hour clock. Then come back to the rest later.

The appendices contain template letters, checklists and a glossary. They are designed to be lifted straight into your firm’s procedures — adapt them, do not copy them blind, and remove the “draft” wording before use.

Chapter 1: What constitutes a “circumstance” and how to recognise one

1.1 The two-stage trigger

A professional indemnity policy responds at two stages of trouble:

A claim is made against you — a written demand for money or for some other form of redress (rectification, an injunction, a refund of fees), arising from a professional service.
A circumstance comes to your attention which may give rise to a claim — even though no demand has yet been made.

Most PI policies in the UK are written on a “claims made and notified” basis. That means the policy that responds is the one in force when the claim is made against you or when the circumstance is notified to insurers, not the one in force when the work was done. If a circumstance is notified during the policy period, any subsequent claim arising from that circumstance is generally treated as having been made during that policy period — even if the claim itself arrives years later.

This makes the notification of circumstances clause one of the most valuable mechanisms in your policy. It allows you to lock the matter into the current policy year, while you still have cover, before a future renewal, hardening market, or change of insurer can complicate matters.

But it works only if you use it. A circumstance you spotted, considered, and decided not to notify is almost always uninsurable later. This is why the discipline of recognising and notifying circumstances matters more than almost any other operational discipline in your firm.

1.2 What a circumstance actually looks like

A “circumstance” is not a feeling. It is not “I have a sense Mr Smith is going to be difficult.” It is a factual situation that a reasonable professional would consider capable of giving rise to a claim. Some examples — drawn from real patterns we see across sectors, not from individual clients:

A client writes to complain that work was delayed and they have suffered loss as a result.
Your firm has spotted an error — an arithmetic mistake in a tax return, a missed registration deadline, a misdescribed boundary, an incorrect specification, a missing exclusion in a report — even if the client has not yet noticed.
A counterparty, regulator or third party threatens action arising out of your professional work, even if their letter is not addressed to you directly.
A file review (internal or external) identifies a defect that means a client decision was made on a flawed basis.
A regulator opens an investigation, a referral or a supervisory visit that touches on a particular client matter or transaction.
A press inquiry, claim management company contact, or letter from a “claims advisor” suggests that clients of yours may be marshalled into action.
A former employee resigns and makes allegations about quality of work — even informally.
A client refuses to pay your fee on grounds of dissatisfaction with the service.
A third party (lender, buyer’s solicitor, beneficiary, HMRC, FCA, SRA) raises a written query that implies your work may have been wrong.

None of these is automatically a claim. All of them are facts a prudent firm would record and consider for notification.

1.3 The reasonable awareness test

UK PI policies typically use a “circumstance which may give rise to a claim” formulation, sometimes refined to “circumstance which a reasonable insured would consider may give rise to a claim.” The test is objective — it is not about whether you think a claim is likely, but whether a competent professional in your position would think it possible.

In practice this means you should err strongly on the side of notifying. The downside of notifying something that turns out to be nothing is generally administrative — a file is opened, kept open for a period, and closed without payment. The downside of not notifying something that later turns into a claim is potentially the loss of cover entirely.

1.4 The “block notification” trap

Some firms try to manage the discomfort of individual notifications by holding circumstances on a list and notifying only at renewal in one block. This is dangerous. If the circumstance was reasonably apparent earlier and not notified, the insurer may decline cover on grounds of late notification. If the policy renews with a different insurer (or with new aggregation terms), the new policy may not pick it up.

Notify when you become aware. Not when it is tidy.

1.5 Internal recognition — making sure circumstances are spotted

Most missed notifications are not deliberate. They happen because the person who first saw the warning sign did not know what to do with it. To prevent this, every Apex client should have:

A single named person (and a deputy) who receives circumstance reports internally. Often the COLP/COFA (for law firms), the MLRO, the risk partner, or the operations director.
A standing item on the senior management agenda for circumstance review — at least monthly.
A written internal threshold below which an event must be escalated to that named person within (typically) two working days of any partner or director becoming aware of it.
No filter at the front line — i.e. fee-earners should not be making notification judgement calls. Their job is to escalate; the named person’s job is to decide.

Apex is happy to review this internal process with you at renewal.

1.6 What is not a circumstance (the false positives)

It is equally useful to know what does not require notification, because over-notification creates noise that drowns the real signal. The following are usually not notifiable in themselves:

A client expresses general dissatisfaction with cost or speed of work, where no allegation of negligence or breach of duty is made.
A counterparty disputes your client’s position in correspondence (your client is being criticised, not you).
Fee disputes where the only complaint is about quantum, not about the quality or legitimacy of the work.
Routine regulatory information requests not directed at a specific matter.
A theoretical discussion in the office about whether something could have been done better.

The dividing line: is there an identifiable matter and is there an identifiable suggestion that your work fell below the standard required? If yes, it is a circumstance. If neither, it is not.

When in doubt, treat as a circumstance and call Apex.

Chapter 2: The 24-hour clock — your first response

The first 24 hours after a circumstance is identified set the tone for everything that follows. The decisions taken in this window decide whether the matter is contained or amplified, whether the evidence is preserved or destroyed, whether cover is preserved or jeopardised, and whether the client relationship is salvageable.

2.1 The 24-hour priorities

In the first 24 hours, you have five priorities, in this order:

Stop the bleeding. If the underlying mistake is ongoing — a deadline approaching, a transaction in flight, a regulator about to act — take immediate steps to mitigate. You are entitled and expected to mitigate. Read paragraph 2.6 below before doing anything irreversible.
Preserve. Stop deletion. Lock the file. Capture screens. Print emails. (Chapter 4 has the detail.)
Centralise. One named person owns the matter internally from now on.
Notify Apex. Verbal first, written within 24 hours.
Say nothing else. No emails, no calls, no apologies, no “without prejudice” letters, no internal post-mortems by email, until you have spoken to Apex.

2.2 The 24-hour cheat sheet

This is the page to print and pin behind the senior partner’s door.

In the first 24 hours, you should:

Identify the matter and the client(s) affected.

Establish what (if anything) has been said in writing to the client or by the client.

Stop any further substantive communication on the matter without compliance/risk sign-off.

Issue a written file-hold (no deletion, no edits) — see Chapter 4 and Appendix B.

Brief the named risk lead in writing — short, factual, no speculation.

Telephone Apex on the client services number you have for us.

Identify the original engagement letter, the policy schedule in force on the date of the relevant work, and the policy schedule in force today.

Identify your insurer’s claims notification email (Apex will confirm).

In the first 24 hours, you should NOT:

Admit liability, in writing or verbally.

Apologise in a way that admits fault (a careful expression of regret is different — see 2.4).

Offer to refund fees, write off invoices, or “make it good.”

Promise a remedy or an outcome.

Discuss the matter on internal email chains that copy in people who do not need to be there.

Allow the affected file to be edited, archived, or sent off-site.

Allow a junior fee-earner to “have a quick call” with the client to sort it out.

Speak to the press, post on social media, or comment publicly.

Conduct an internal disciplinary discussion about who is “at fault” before Apex and panel solicitors are engaged.

2.3 The “stop the bleeding” exception

There is one common, valid exception to the “say nothing” rule: where the underlying error is ongoing and inaction will worsen the loss. Examples include a limitation period about to expire, a tax election about to lapse, a planning condition about to be triggered, a regulatory deadline approaching, a transaction completing on a flawed basis.

In these cases you should:

Take the minimum necessary action to prevent further loss.
Document what you have done and why, contemporaneously.
Tell Apex immediately what you have had to do.
Do not, in the course of mitigation, make any wider admissions or offers.

Insurers expect their insureds to mitigate. They do not expect mitigation to come with apologies, settlements or admissions attached.

2.4 The language of regret without admission

The difference between an apology that compromises your cover and a courteous expression of regret that does not is mostly a matter of grammar. Compare:

Compromising: “I am so sorry — we got this wrong. I will make this right.”

Acceptable: “I am sorry that you have had this experience and that you are unhappy. I am taking this seriously. I will come back to you once I have looked into it.”

The first admits fault and promises a remedy. The second acknowledges the human situation without admitting liability or offering an outcome. Train your team on the difference. Most professionals are natural apologisers — it is part of the job — and the muscle memory needs adjusting in a claims context.

2.5 Who in your firm needs to know in the first 24 hours

Keep it tight. Typically:

The named risk lead (COLP/COFA/risk partner/operations director).
The managing partner / managing director.
The fee-earner(s) directly involved (because they have the knowledge).
Apex.

That is usually enough. Do not brief the wider partnership, the marketing team, or HR until there is a reason. Wider circulation creates more documents, more opinions, more avenues of disclosure, and more risk of inadvertent admission.

2.6 Common first-24-hour mistakes

These are the ones we see repeatedly:

The “without prejudice” letter sent the same day. Without prejudice does not mean “without consequence.” It does not protect you from cover issues if the letter contains admissions or offers your insurer has not authorised.
The reassuring phone call. A partner phones the client to “calm things down.” The client records the call, or makes a contemporaneous note. The partner says more than they meant to. The note becomes evidence.
The internal Slack/Teams thread. An informal channel where colleagues post candid opinions about what went wrong. All disclosable.
The “quick fix” deployment. A team rushes to correct the underlying error without preserving evidence of the original state. Now the insurer cannot see what happened, and the client cannot prove their loss arose from your version, not the fix.
The off-the-record conversation. There is no such thing in a claims context.

Chapter 3: Notification — what to say, what NOT to say, who tells whom and when

3.1 Two notifications, two audiences

In every PI matter there are at least two notifications that must happen:

To your insurer, via Apex.
To your regulator (where their rules require it). The threshold and timing varies by regulator — covered in the sector addenda.

There may be others (a buyer’s lender, a parent company, a JV partner) depending on context. We will help you map them.

3.2 Notification to your insurer

A good notification is short, factual and timely. It is not the place to argue the case. The structure we recommend is:

Insured name and policy number.
Date the circumstance came to the insured’s attention and how.
Identity of the client(s) and any third party known to be involved.
The work in question — what, when, by whom, under what engagement.
The nature of the alleged error or concern — described factually, in neutral terms, without concession or apology.
Any written demand or correspondence received — attached, not summarised.
Any action already taken — particularly mitigation.
The insured’s current view of potential quantum — a range is fine; if you genuinely cannot estimate, say so.
Contact for the matter — one named person, with deputy.

Send by the route your policy schedule specifies. Most modern UK PI policies have a dedicated claims notification email and a notification clause that is satisfied by notification via the broker. Apex will both forward and acknowledge.

3.3 What NOT to say in a notification

Do not write the notification as an apology or a confession.
Do not include speculative discussion of “what we should have done.”
Do not attach internal blame-allocation emails.
Do not include unfinished investigations or guesses presented as facts.
Do not include legal advice you have already received without first clearing with the giver of that advice — privilege can be waived.

A notification that reads like a “mea culpa” gives the insurer no choice but to engage on terms set by the insured. A clean factual notification gives them room to think clearly about defence strategy.

3.4 Notification to your regulator

We deal with this in detail in the sector addenda. As a general principle:

Notification to your regulator is a different decision from notification to your insurer.
The two can usually be done in parallel.
A regulator notification is more likely to be public-record (especially via your firm’s regulatory return at year end), so the words matter more.
Where there is doubt, you should take regulatory advice before notifying — but do not let that delay the insurer notification.

3.5 Notification to the affected client

This is the most sensitive of the three. There is no fixed rule that you must immediately tell the client there has been an error — but in most professional contexts (and in some regulated contexts) you must do so, and doing so badly will compound the problem.

Practical points:

Do not write to the client until you have spoken to Apex and, if engaged, panel solicitors.
The first communication to the client is usually short, neutral, and offers a follow-up call or letter once the position is understood.
Where the client is themselves a professional firm (e.g. a lender’s solicitor writing to your firm), expect the correspondence to be drafted for the litigation record. Reply in kind.

3.6 Notification timing — the “as soon as practicable” clause

Most UK PI policies require notification “as soon as reasonably practicable” — sometimes within a specified number of days. Excelsior 28-day or 14-day periods are commonplace in solicitor schemes (e.g. the SRA Minimum Terms and Conditions require notification as soon as practicable). Even where the contractual clock is generous, the prudent practice is “within days, not weeks.”

Document when you became aware. Document when you notified. The gap between those two dates is the most important number in any later cover dispute.

3.7 Who tells whom — the cascade

The notification cascade for a typical matter:

Fee-earner → Risk lead (within 2 working days of awareness; ideally same day).
Risk lead → Apex (by phone, same day).
Apex → Insurer (typically same day or next working day, with formal written notification from the insured).
Insured → Regulator (per regulator rules — see sector addenda).
Insured → Client (after Apex/panel input; timing varies by matter).
Insured → Other interested parties (lenders, JV partners) — as instructed by panel solicitors.

Do not let step 2 wait for step 1 to be tidy. A holding call to Apex with the bare facts is better than a polished email three days later.

Chapter 4: Documentation — what to gather, how to preserve evidence, what about deletion holds

4.1 Why evidence preservation comes first

In any PI matter, three things determine the outcome: the underlying duty, the underlying breach, and the contemporaneous record of both. The first two are fixed by the time you become aware of the matter. The third is in your hands from the moment you become aware — and is the one most often damaged by routine business activity in the days after.

A file that has been “tidied up,” an email mailbox that has been auto-archived, a Teams chat that has rotated out of retention, a backup that has been overwritten — each of these turns a defensible matter into a difficult one. Evidence preservation is the cheapest and most valuable single action in the first 24 hours.

4.2 The litigation hold (or “deletion hold”)

A litigation hold is a written instruction within your firm that prevents the deletion, alteration, archiving or destruction of any record that may be relevant to a specific matter. It overrides ordinary retention policies and standard system housekeeping.

The basic anatomy:

Scope — the client(s), the matter(s), the time window, the data sources.
Audience — every person who may hold relevant records (fee-earners, secretaries, IT, finance, anyone who touched the matter).
Specific systems — case management, email, document management, finance system, time recording, mobile messaging, chat, voicemail, calendar, paper files, dictation.
Duration — until lifted in writing.
Sanctions — clear statement that breach is a disciplinary matter.

A template hold notice is at Appendix B.

4.3 The five rules of evidence preservation

Capture in original form. Save emails as .msg or .eml with full headers, not as copy-pasted text. Save chat threads with timestamps. Print to PDF, but keep the native file too.
Don’t edit. No “cleaning up” of metadata, no “let me just fix that typo,” no “I’ll move this to the right folder.”
Don’t delete — anything. Including embarrassing internal exchanges. They are disclosable but they will be far worse if you delete them and the deletion is later detected.
Take account of mobile. WhatsApp, iMessage and personal email are increasingly central to commercial work. If business has been transacted there, those records are in scope.
Lock backups. Engage IT immediately. Standard backup-and-rotate cycles will overwrite your evidence within 7–30 days.

4.4 What to gather (the evidence inventory)

For most PI matters the evidence inventory looks like:

The engagement letter and any subsequent letters of variation.
The scope-of-work documents, briefs, instructions.
The work product as delivered to the client (final and any superseded drafts).
The internal review records — peer reviews, checks, sign-offs.
The correspondence with the client (email, letter, file notes of meetings and calls).
The internal correspondence about the matter.
The financial record — invoices, receipts, disbursements.
The time records — who did what and when.
Any third party material received — instructions from the client’s other advisors, due diligence reports, regulatory correspondence.
The regulatory and statutory framework in force at the relevant date.

Where any of these are stored in a third-party SaaS (Microsoft 365, Google Workspace, case management cloud), arrange an export of the relevant subset immediately and store it under named control.

4.5 Mobile, messaging and BYOD

If your firm allows business communication via personal phone, personal email, or unmanaged messaging apps, you have a structural evidence problem. We strongly recommend that all professional firms restrict business communications to managed systems with retention controls. Pending that, in a live matter:

Issue a hold notice that specifically covers personal devices and personal accounts.
Arrange forensic capture of relevant exchanges — there are specialist suppliers if you do not have in-house capability.
Document the steps taken, in case the question is later asked.

4.6 Special problems with cloud and SaaS

Many client matter systems run on cloud platforms with their own retention defaults. In particular:

Email: Microsoft 365 and Google Workspace retain deleted items only for a configurable period.
Document management: native version histories may roll off.
Chat: Teams, Slack and equivalents have separate retention from email.
Telephony: Cloud phone systems often retain call logs but not audio; some retain audio for short periods.

Map your systems before a claim. Maintaining an inventory of where business records live, and what the default retention is on each, is a Chapter 11 (“lessons learned”) action that pays off only when you need it.

4.7 Privilege — what is and is not protected

This is a complex area and you should take legal advice in any specific matter. As a working summary:

Communications between you and your panel solicitors (once engaged) attract legal advice and litigation privilege.
Communications between you and the insurer in the context of a notification often attract common interest privilege.
Internal communications about the matter, written by fee-earners discussing what may have gone wrong, do not attract privilege simply because someone has written “privileged and confidential” at the top.
Email exchanges with non-lawyers (including with Apex on substantive matters) are not automatically privileged.

The practical implication: assume any internal communication after a notification is disclosable. Write accordingly.

Chapter 5: Communication discipline during a live claim

5.1 The principle

Once a matter is open with insurers, all substantive communication about it is potentially evidence. This includes your communication with the client, with third parties, internally, on social media, in supplier and partner relationships, and in marketing.

The principle is: anything you write or say about the matter, you write or say as if it will be read aloud in court.

5.2 The four channels and how to handle each

Channel 1: Client communication. Limited, factual, drafted with panel input where appropriate. No speculation. No remedy offers. No discussion of insurance arrangements. Where the client demands answers immediately, respond with a holding letter and a timeline for fuller response.

Channel 2: Internal communication. Centralise. Use a single email thread or a single risk-management portal. Do not let the matter sprawl across multiple chats and channels. Train everyone involved to write as if disclosable.

Channel 3: External (non-client) communication. No comment is almost always the right answer to journalists, claims management companies, regulators (other than the formal notification route), and competitors. Refer all approaches to the named risk lead.

Channel 4: Marketing and social. Suspend any campaign material referencing the matter, the client or the affected sector for the duration. Do not “respond” to negative coverage on social media — you cannot win, and you can lose.

5.3 Internal hygiene

One named person owns external communication. One named person owns internal communication.
All material communication is logged.
Casual mentions of the matter in unrelated meetings are discouraged.
HR aspects (if any) are run separately, with their own privilege analysis.
Outside advisors (auditors, accountants, IT consultants) are briefed on a need-to-know basis only.

5.4 Communications during a regulator-driven matter

Where a regulator has driven the matter (e.g. the SRA, ICAEW, FCA, RICS, ARB), the regulator and the insurer’s interests sometimes diverge. Both want to see the firm conduct itself responsibly. The regulator’s primary interest is in protecting consumers and the integrity of the profession; the insurer’s primary interest is in resolving the civil claim with minimum cost. Most of the time these are aligned. Occasionally — for example, around admissions, around remedial work, around staff disciplinary action — they are not. Take advice.

5.5 The press

Most PI matters do not become press matters. Those that do are usually high-value, sector-leading, or involve a named individual. If a press call comes in:

Decline to comment.
Do not say “no comment” rudely; “I will need to speak to colleagues; please send me your questions in writing and I will come back to you within X” is fine.
Tell Apex and panel solicitors immediately.
Consider whether a holding statement (drafted with panel input) is required.
Do not, under any circumstances, brief on background.

Chapter 6: Working with your insurer’s panel solicitors

6.1 What “panel” means

Most UK PI insurers maintain a panel of specialist defence solicitors with whom they have negotiated rates and service expectations. When a notification crosses the threshold for legal involvement — typically because litigation is threatened, because the matter is technically complex, or because there is a regulatory dimension — the insurer instructs a panel firm.

You are not obliged to like the panel firm. You are obliged to cooperate with them. Their job is to defend your firm against the claim, in your interests and the insurer’s. They are your lawyers in the matter, even though the insurer pays them.

6.2 The first call

The panel solicitor will usually want an early call. They will want:

Your account of events.
The documents (see Chapter 4 inventory).
The personnel directly involved.
Your view on quantum and on causation.
An understanding of the regulatory context.

Be candid. Privilege protects you. The relationship is most effective when the panel firm has the complete picture early.

6.3 What the panel firm will do for you

Review the matter and form a preliminary view on liability and quantum.
Recommend a strategy — defend, negotiate, mediate, settle.
Take conduct of correspondence with the claimant (or claimant’s lawyers).
Advise on regulatory interaction.
Prepare for litigation if it comes to that.
Liaise with the insurer on reserve and indemnity.

6.4 What the panel firm will not do for you

Run unrelated commercial advice.
Bypass the insurer on settlement authority.
Defend the matter on a basis the insurer has not approved.
Advise on coverage disputes between you and the insurer (you may need separate “coverage” counsel for that — Apex will help).

6.5 Common friction points and how to handle them

Speed. Panel firms have caseloads. If you need them faster, say so, and escalate via Apex if needed.
Tone. Panel correspondence is sometimes blunt. It is for the litigation record, not the relationship. Do not take it personally.
Settlement. You may want to fight; the insurer may want to settle (or vice versa). The policy gives certain rights of consent. Read your wording. Apex can help navigate.
QC’s opinion. For larger matters, the insurer may want counsel’s opinion before deciding strategy. This is normal. Cooperate with it.

6.6 Coverage vs liability

Two separate questions arise in every claim:

Are you liable to the claimant (the liability question)?
If so, does the policy respond (the coverage question)?

The panel solicitor handles 1. The insurer’s coverage team — sometimes via separate coverage counsel — handles 2. Where the answers diverge (e.g. you might be liable but the policy might exclude this loss), you may need your own coverage advice. Apex will flag this and help.

Chapter 7: Working with Apex during a claim — what we do for you

7.1 What Apex does

Apex acts as your insurance broker. In a claim, our role is:

To act as the formal notification channel to your insurer.
To advocate for you in interpretation of policy terms.
To help you understand reserves, excesses, aggregation and run-off.
To coordinate with the insurer’s claims handler and (where engaged) panel solicitors.
To flag coverage issues early and recommend independent coverage advice if needed.
To help you frame the renewal conversation that comes after.
To keep your other key cover (cyber, D&O, employers’ liability) joined up where the matter touches them.

7.2 What Apex does not do

We do not run the legal defence — that is the panel firm.
We do not make settlement decisions — those are between you and the insurer.
We do not give legal or regulatory advice.
We do not offer guaranteed service levels for claims handling — those are the insurer’s, not ours, and they vary by insurer and matter.

It is important to be honest about this. Many brokers oversell their role in claims, particularly in renewal pitches. We would rather be useful where we are useful, and direct you to the right person where we are not.

7.3 How to contact us in a claim

Phone first for anything urgent. The number is in your policy schedule and on the back of this handbook.
Email for routine notification documents.
Out of hours — phone Apex and follow the voicemail instructions. We monitor.

7.4 What we will ask you for

The bare facts (Chapter 3 notification structure).
The policy schedule in force on the date of the work.
The policy schedule in force on the date of notification.
The relevant engagement letter(s).
Your nominated contact for the matter.

7.5 What we will give you

Acknowledgement of receipt, same working day.
Confirmation of which insurer is on cover and how the notification has been routed.
A view on which clauses of the policy are in play.
Flagging of any coverage issues we see.
An introduction to the insurer’s claims handler.
Where appropriate, an introduction to specialist coverage counsel.

We do not promise outcomes. We do commit to be accessible and candid.

Chapter 8: Reserves, excess and aggregation in action

8.1 The reserve

A “reserve” is the insurer’s internal estimate of the likely ultimate cost of the matter (defence costs plus indemnity). It is not a payment; it is an accounting entry. It is reviewed and adjusted as the matter develops.

Reserves matter to you because:

They appear on your claims history.
They drive future renewal pricing.
They influence the insurer’s appetite for settlement vs. defence.
They are sometimes shared with reinsurers, with consequences you cannot see.

A reserve set too high early — for example, on a worst-case basis on incomplete information — can have lasting effects on your premium. A reserve set too low can cause uncomfortable surprises later. Apex can have a constructive conversation with insurers about reserves at appropriate intervals.

8.2 The excess

The excess (sometimes called the deductible) is the first slice of any covered loss that you bear yourself. PI excesses vary widely — from a few thousand pounds in smaller firms to six or seven figures in larger ones, and sometimes structured as costs-inclusive or costs-exclusive.

Two practical points:

The excess is usually payable when the matter is settled or judgment is given, not at notification.
Some excesses apply per claim; some apply per claimant. Aggregation (see 8.3) interacts with this.
Excess management at year-end — i.e. understanding what you may owe — is a board-level matter.

8.3 Aggregation

Aggregation is one of the most technical, and most commercially important, areas of PI insurance. It is the question of when two or more apparently separate claims are treated as a single claim for the purposes of (a) the limit of indemnity and (b) the excess.

Aggregation clauses vary by sector, by insurer and by policy. Typical formulations include:

“Arising from one originating cause or source.”
“Arising from a series of related acts or omissions.”
“Arising from the same underlying transaction or document.”

The consequences are real:

Multiple claims aggregated upward = one excess, one limit, potentially one event that exhausts cover.
Multiple claims kept separate = multiple excesses, each within its own limit.

Whether aggregation favours you depends on the matter. Where there are multiple small claims from a single underlying error, aggregating up can be in the insured’s interest (one excess vs. many). Where there is a large claim that risks exhausting the limit, splitting down can be in the insured’s interest. Apex will help you think this through.

8.4 Sub-limits and inner limits

Some PI policies contain “sub-limits” — a smaller cap that applies to specific heads of loss (e.g. defamation, regulatory investigation costs, document recovery costs, cyber-adjacent loss). Sub-limits are easy to miss until they bite. When notifying a matter, identify which sub-limits may apply.

8.5 Costs-inclusive vs costs-exclusive

In a costs-inclusive policy, defence costs erode the limit of indemnity. In a costs-exclusive policy, defence costs sit outside the limit. The difference can be very material in a heavily-defended matter. Check your schedule.

8.6 Multi-year cover and aggregation across years

If a matter spans more than one policy year — for example, a series of related transactions over a long period, only one of which is the subject of complaint — different policies may respond to different parts of the matter. The interaction of multi-year aggregation and changing insurer between years is a specialist area. We will help.

Chapter 9: Subrogation and recovery

9.1 What subrogation is

Subrogation is the right of an insurer, after paying a claim, to step into your shoes and pursue any third party who is partly or wholly responsible for the underlying loss. If the insurer recovers from the third party, the recovery generally reduces the net cost of your claim.

9.2 Why this matters to you

A successful subrogation recovery can:

Reduce the recorded claim cost on your claims history.
Improve your position at renewal.
Sometimes (depending on policy terms) refund some or all of the excess you paid.

It is therefore in your interest to support subrogation — even when the matter has otherwise been resolved.

9.3 Common subrogation targets in PI matters

A sub-contractor or consultant who was partly at fault.
A supplier whose product or service caused or worsened the loss.
A counterparty under a contractual indemnity.
A previous advisor whose work was relied upon.

9.4 What you can do to preserve subrogation

Do not, in settling other contracts, release third parties from claims that may belong to your insurer.
Do not waive contractual indemnities or limitations against third parties without telling Apex.
Where your engagement letters or sub-contracts contain reciprocal indemnities, preserve them.
Where you discover sub-contractor or supplier fault during the matter, document it.

9.5 Subrogation against employees

Insurers generally waive subrogation against employees of the insured firm, unless conduct rises to the level of dishonesty or wilful misconduct. Where employee conduct is in issue, take advice immediately.

Chapter 10: The renewal conversation after a claim

10.1 What changes after a claim

A notified circumstance — even one that does not develop into a paid claim — appears on your firm’s claims history. Renewal underwriting takes account of it. The realistic effects can include:

A modest premium increase (most common, even where the matter is closed nil).
A change of insurer at renewal (where the existing insurer declines to renew or changes terms materially).
A change in excess or in aggregation language.
New conditions or restrictions on certain areas of work.
A request for additional information at renewal (claims questionnaire).

This does not mean every notification is “expensive.” Underwriters expect professional firms to have circumstances. They are suspicious of firms with no notifications — it usually means under-reporting.

10.2 The narrative matters

The single most important factor in a post-claim renewal is the narrative. Underwriters read a long list of notifications differently if the firm can show:

That each notification was made promptly.
That the firm has identified the underlying cause(s).
That the firm has put in place changes to reduce the chance of recurrence.
That those changes are real (i.e. not just a paragraph in a manual).

We will help you prepare this narrative. It usually goes into the renewal questionnaire and into a covering submission to the underwriter. It works because it shifts the conversation from “what went wrong” to “how the firm has improved.”

10.3 The “lessons learned” loop

A firm that has worked through Chapter 11 of this handbook (lessons learned) will have a substantive answer to the underwriter’s “what have you changed?” question. A firm that has not will have generic-sounding answers and will pay for it.

10.4 When to start the renewal conversation

Start three months before renewal in any year following a notification. We will guide the timeline.

10.5 What we will need from you

A short narrative of each open matter.
An updated claims history (we draft, you review).
Any process or governance changes you have made.
Updated financial information.
Updated CV / capability information where relevant.

10.6 What we will do

Brief the underwriting market constructively.
Engage with multiple insurers where appropriate to ensure terms are tested.
Negotiate aggregation, excess and sub-limit language.
Flag run-off and tail considerations where relevant.

Chapter 11: Lessons learned — turning claims into prevention

11.1 The principle

Every notification is information. The firms that grow stronger after claims are the firms that use that information. The firms that do not are the firms that have the same claim repeatedly.

This chapter is short on purpose. It is a checklist for the post-claim review, designed to be run by the named risk lead (or a small risk committee) once the matter is concluded — or, in long-running matters, at appropriate milestones.

11.2 The post-matter review

Run the review with the people who were involved. Cover, at minimum:

What happened, in plain English. Sequence of events, not blame allocation.
What the underlying root cause was — process, training, supervision, system, capacity, culture, isolated error.
What was done well in the response.
What was done badly in the response.
What changes are warranted — process, training, governance, system, supervision.
Who owns each change. Named, dated.
How the change will be verified — audit, review, monitoring.

Document the review. Keep it under privilege where you can. Share the changes (not the analysis) with the wider firm and at the next renewal.

11.3 Anti-patterns to avoid

Blame. Reviews that identify individuals create defensive cultures and miss systemic causes.
Cosmetic changes. “We added a paragraph to the manual” is not a change.
One-and-done. Lessons need verification six and twelve months later.
Closed loops. Confining the lessons to the team involved hides the wider message.

11.4 Linking lessons to the risk register

This is the link between this handbook and the Risk Management Toolkit. Every concluded lesson should feed your firm’s risk register (see the Toolkit). A risk register that does not move as a result of claims is one that is not doing its job.

Appendices

Appendix A: Template notification letter (insurer)

Draft. Adapt to facts. Remove the “Draft” wording before sending. Send by the route specified in your policy schedule.

To: [Insurer claims notifications inbox] Cc: Apex Insurance Brokers Ltd — [claims contact email] From: [Insured firm, by named partner / director] Date: [Date] Subject: Notification of circumstances — [Firm name] — Policy [number] — [Matter reference]

Dear Sirs,

Notification of circumstance under Policy [number]

We notify you of a circumstance which may give rise to a claim, in accordance with the notification provisions of the above policy.

Insured: [Firm name].

Policy number: [number]; Period: [from] to [to].

Date and source of awareness: We became aware of this circumstance on [date], when [neutral description of triggering event].

Client and parties: [Client name], [other known parties].

Underlying work: [Description of the professional service in question — what, when, by whom, under what engagement].

Nature of concern: [Neutral factual description of the alleged error or potential issue]. We make no admission of liability.

Correspondence: We attach [list of attachments] including [any written demand, any client correspondence].

Action taken to date: [Mitigation steps and evidence preservation steps taken].

Indicative quantum: [Range, with stated assumptions; or “not currently estimable”].

Contact: [Named contact, role, email, phone]. Deputy: [Named contact, role, email].

We will provide further information as the matter develops. Please acknowledge receipt and confirm your appointed handler.

Yours faithfully, [Name, role] [Insured firm]

Appendix B: Evidence preservation checklist (litigation hold)

Issue this notice to all personnel who may hold records relating to the matter. Issue same day as awareness.

To: [Distribution list — fee-earners, secretaries, IT, finance, anyone who touched the matter, partners / directors with oversight] From: [Named risk lead] Date: [Date] Subject: LITIGATION HOLD — Matter [reference] — Action required

A matter requiring full evidence preservation has been identified. The matter is [neutral description sufficient to identify scope; do not characterise].

From the date of this notice and until further written notice, no record relating to this matter is to be deleted, altered, archived off-site, overwritten or destroyed.

This applies regardless of any ordinary retention schedule or system housekeeping.

Records in scope include:

All emails sent or received concerning the matter, including from personal accounts where business has been transacted there.

All documents, drafts, notes (including handwritten and dictated), in any system or location.

All chat messages (Teams, Slack, WhatsApp, iMessage, others) where business has been transacted.

All file notes, telephone notes, attendance notes.

All time records and billing records.

All financial records.

All calendar entries.

All voicemails and call logs (request retention extension from your telephony provider where applicable).

All physical files and post.

If you become aware of any system or location holding relevant records not listed above, notify the undersigned immediately.

If you become aware of any deletion, alteration, or loss that has already occurred, notify the undersigned immediately. Do not attempt to recover it yourself.

Acknowledge receipt of this notice by reply within 24 hours.

Breach of this notice will be treated as a disciplinary matter.

[Named risk lead] [Title] [Firm name]

Appendix C: Communications — do / don’t list

Print and circulate to anyone working on the matter.

DO

Centralise communication through the named risk lead.

Write as if everything will be disclosed.

Keep responses to the client factual, short, courteous.

Use neutral language to acknowledge difficulty without admitting fault.

Tell Apex about every new development.

Tell panel solicitors about anything material before it goes out.

Document mitigation steps contemporaneously.

Keep regulator interaction on the formal route.

DON’T

Apologise in admissive terms.

Offer remedies, refunds or write-offs unilaterally.

Discuss the matter on informal chat channels.

Discuss the matter at large meetings.

Speak to the press, claims management companies or competitors.

Conduct internal post-mortems by email before privilege is established.

Allow the file to be edited or “tidied.”

Send “without prejudice” letters without panel input.

Brief the partnership / wider team before there is a reason.

Settle, even informally, without insurer consent.

Appendix D: Key contacts

Replace placeholders with current contacts before issue.

Apex Insurance Brokers Ltd Claims notifications: [phone] / [email] Out of hours: [phone] / voicemail monitored Named contact: [name, role]

Your insurer claims team [Insurer name] Notifications inbox: [email] Phone: [phone]

Your firm — internal Named risk lead: [name, role, phone, email] Deputy: [name, role, phone, email] Managing partner / director: [name, role, phone, email] IT / data preservation: [name, role, phone, email] Compliance / regulatory: [name, role, phone, email]

Your regulator (per sector — see addendum) [Regulator notifications channel]

Appendix E: Glossary

Aggregation — The contractual rule for whether two or more claims are treated as one.
Block notification — The (risky) practice of notifying multiple circumstances at renewal in one batch.
Circumstance — A factual situation which may give rise to a claim under a “claims made and notified” policy.
Claims made and notified — A policy structure under which the policy responding is the one in force when the claim is made against you (or the circumstance notified), not when the work was done.
COLP / COFA — Compliance Officer for Legal Practice / Compliance Officer for Finance and Administration. SRA-regulated firms.
Costs-inclusive / costs-exclusive — Whether defence costs erode the limit of indemnity or sit outside it.
Deductible — Same as excess.
DPB — Designated Professional Body (e.g. ICAEW for accountants providing limited regulated activities).
Excess — The first slice of a covered loss borne by the insured.
Inner limit / sub-limit — A smaller cap within the main policy limit, applicable to specific heads of loss.
Litigation hold / deletion hold — A written instruction preventing the deletion or alteration of records relevant to a matter.
MTC — Minimum Terms and Conditions (e.g. SRA MTC for solicitor PI).
Notification — The formal act of telling the insurer about a circumstance or claim.
Panel solicitor — A specialist defence solicitor instructed by the insurer.
Privilege — The legal protection of certain communications from disclosure.
Reserve — The insurer’s internal estimate of the ultimate cost of a matter.
Run-off — Cover purchased after a firm ceases trading or ceases a class of work, to respond to claims arising from work done before cessation.
Subrogation — The insurer’s right to step into the insured’s shoes to recover from a responsible third party.
Without prejudice — A label intended to prevent a communication being used as an admission in litigation. Does not protect against cover issues.

Regulatory and version control

This handbook is published as a draft pending Apex compliance review. It is generic and sector-neutral. It should be read in conjunction with the sector-specific addendum applicable to your firm. Nothing in this handbook overrides the terms of your insurance policy or your regulator’s rules. Where there is conflict, the policy and the regulator’s rules prevail.

Version: 1.0 (draft, May 2026) Next scheduled review: May 2027 or earlier on material change to PI market or to underlying regulation. Owner: Director, Apex Insurance Brokers Ltd.

Apex Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority. FCA Firm Reference Number 724952. Registered in England and Wales, company number 07014570. Registered office: Bristol, United Kingdom. This document is provided to Apex clients as a general guide. It is not legal advice and is not a substitute for the terms of your insurance policy. Always read your policy schedule and wording. If you have a circumstance or claim, contact Apex without delay.

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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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