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Professional indemnity explained
A continuing PI clause is a contract term requiring you to keep professional indemnity insurance in force for a set period, usually 6 or 12 years, after completing the work. It matters because claims made policies only respond while renewed.
Part of: Professional indemnity insurance
In short
A clause requiring PI "for 6 or 12 years after completion" means you must keep renewing a professional indemnity policy, at the stated limit and basis, for that whole period. The periods mirror the Limitation Act 1980: six years for most contracts and negligence claims, twelve for contracts signed as deeds. Because PI is claims made, cover must still be live when a claim arrives, so retirement or closure usually needs run-off cover. Many clauses add "so long as available at commercially reasonable rates", which softens the duty but still requires you to tell the client if cover becomes unavailable.
A clause saying you must maintain professional indemnity (PI) insurance for 6 or 12 years after completion is a promise to keep a live PI policy in force, every year, for that whole period. It is not a promise to buy one long policy. PI is almost always written on a claims made basis, so the policy that responds is the one in force when the claim is made against you, not the one in force when you did the work. If you let cover lapse in year four, a claim in year five has nothing to fall on.
That is why clients and their lawyers ask for it. They know a negligence claim can surface years after a project finishes, and they want to be sure there is an insurer behind you when it does. See claims made vs occurrence PI for how the trigger works.
In short, the clause usually means three things:
The two figures track the basic limitation periods in the Limitation Act 1980. A claim for breach of an ordinary contract, or in negligence, generally has to be brought within six years of the cause of action accruing. A contract executed as a deed is a "specialty", and section 8 gives twelve years for an action on a specialty. So clients who sign appointments as deeds usually ask for 12 years of PI to match the longer exposure.
| How the contract is signed | Basic limitation period | PI period clients commonly ask for |
|---|---|---|
| Simple contract (signed under hand) | 6 years from breach | 6 years from completion |
| Deed | 12 years from breach | 12 years from completion |
| Negligence (tort) | 6 years from damage, with a latent damage extension | Often driven by the contract figure |
Those are not the only time limits. For latent damage, section 14A can allow a claim within three years of the claimant knowing about it, subject to a 15 year longstop under section 14B. For some building work, section 135 of the Building Safety Act 2022 introduced a 15 year period for certain Defective Premises Act claims and 30 years for older claims under section 1. Our guide to how long a client can sue for professional negligence sets these out in full.
Many appointments, particularly in construction, do not make the obligation absolute. They add words such as "provided such insurance is available at commercially reasonable rates". That qualifier matters. Without it, you are promising to buy cover even if the market withdraws or premiums rise sharply, and failing to do so is a breach of contract in itself.
With it, you usually still have to tell the client promptly if cover stops being available on reasonable terms, and the client may want to discuss alternatives. Our page on commercially reasonable rates in PI clauses explains who tends to decide what is reasonable and how fire safety and cladding cover fits in.
Check the wording carefully. Some clauses also fix the limit "for each and every claim" or require cover "with reputable insurers", and those words bind you just as firmly as the period does.
Collateral warranties to funders, purchasers and tenants commonly repeat the same PI obligation, so one project can create several parallel promises. Our guides to collateral warranties and PI and PI requirements in JCT and NEC appointments cover how those stack up.
An engineer signs several appointments as deeds with 12 year PI obligations, then retires three years later. Closing the practice does not end the contractual duty. The usual answer is run-off cover, a policy that responds to claims made after the practice stops trading. Run-off is commonly bought annually or for a fixed term, and its cost and availability depend on the insurer and the claims history.
A design consultant promised £5m each and every claim for 12 years. Five years on, the market offers only £2m for some work types. If the contract has a commercially reasonable rates qualifier, the consultant notifies the client and records why. If it does not, the consultant may be in breach and should take advice before renewal.
While you keep trading, the continuing obligation is met by your normal annual renewal, so the cost is simply your ongoing premium. The pressure comes when your circumstances change. If turnover falls, you may still need to buy the full contractual limit for old projects. If you stop trading, run-off premiums are commonly lower than a full trading premium but still payable for each year you need cover. Insurers price run-off on the work done, the claims record and the limit required. Our guide to run-off when you retire or sell explains the options in more detail.
A limited company closes and is struck off. A client can still pursue claims in some circumstances, and individuals may face direct claims. Read our guide to insurance when closing a limited company before winding up.
Apex arranges professional indemnity insurance and run-off for UK professionals; a broker reads every enquiry.
No. It usually means you must renew a PI policy every year for 12 years, keeping the stated limit and basis. PI is normally claims made, so the policy in force when the claim arrives responds. Single multi year policies exist for some projects but are not the usual way to comply.
If your contract includes a commercially reasonable rates qualifier, you generally need to notify the client and show that cover was not available on reasonable terms. Without that qualifier, failing to maintain cover may be a breach of contract. Speak to your broker before the renewal date, not after it.
If you have signed contracts requiring continuing PI, the obligation usually survives retirement or closure. Run-off cover is the common solution. It responds to claims made after you stop trading for work done before, subject to the policy terms, limit and any exclusions.
Under the Limitation Act 1980, an action on a deed (a specialty) can generally be brought within 12 years rather than the six years that apply to most simple contracts. Clients therefore tend to ask for PI to be kept in force for 12 years to match that longer exposure.
Often, yes. If the appointment does not need to be a deed, you can ask for a simple contract and a six year PI period. Where a deed is required, ask for the commercially reasonable rates qualifier, a clear definition of completion, and a limit that matches the cover you actually buy, so the promise is one you can keep.
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.
