FCA authorised · FRN 7249520117 325 0027Quote & buy →
Most insurance re-prices this year’s risk. Professional indemnity re-prices your whole history. That single fact explains most of the shock.
PI responds to claims made during the policy period, whenever the underlying work was done. So the insurer quoting your renewal is taking on every project, report, design and piece of advice in your back catalogue — priced at its current view of your profession, not the view that prevailed when the work was done. When that view moves, years of exposure re-price at once.
Notifying circumstances is the right discipline — it protects your position. But an open notification sits on your record and changes how the risk reads, even if it never costs a pound. The difference between a punishing rate and a fair one is frequently the story around the notification: what it was, why it arose, what changed. That story has to be told; a renewal form has no box for it.
PI capacity is class-by-class. When claims patterns turn against a profession, insurers tighten terms across every firm in it or leave the class altogether; the survivors pick carefully and charge for the privilege. Firms with clean records get caught in this — the class re-prices, and you are in the class.
PI is rated substantially on fee income. A good year — more fees, bigger projects, larger clients — feeds directly into the rating base. Growth also often changes the kind of exposure: bigger contracts carry bigger claims. Some increase after a strong year is arithmetic, not punishment; how much is the question a re-marketing answers.
Underwriters price the mix, not the label. A design consultancy that took on novel structural work, an accountant moving into tax planning schemes, an IT firm now advising on security — shifts toward higher-risk work re-rate the whole account. If your declared split of activities is out of date in the other direction — you stopped doing the risky thing — correcting it is free money.
Some doubled premiums are not prices at all; they are exit letters. An insurer withdrawing from your profession quotes terms designed to be declined. The tell is steepness plus silence: a very large rise, tightened conditions, no appetite for discussion. Arguing is pointless — the decision predates your renewal. Access to the markets still writing your profession is the entire game, and that is broker work: see our hard-to-place PI guide.
Retiring or closing the practice doesn’t end the exposure — claims can arrive years after the last invoice. Run-off cover holds the protection open over those years, and because the insurer stays on risk with no new fee income behind the policy, it is priced accordingly — often as a multi-year commitment. It is far better arranged deliberately, alongside your final trading renewal, than discovered as an afterthought when the practice has already stopped billing.
Three things, none of which a form on a website does. Presentation: a submission that reads like the risk you actually are — the work mix evidenced, the claims record explained rather than listed, the risk management shown. Underwriters price uncertainty; a good presentation removes it. Market access: the insurers still writing hardened professions rarely quote online; a specialist broker deals with them constantly and knows current appetite. Structure: above a certain size, one insurer need not carry the whole limit — layered programmes, a primary layer with excess layers above it, can rebuild a limit the primary market alone would no longer offer sensibly. For larger firms this shades into full programme design, which is what our PI programme review exists for.
Don’t lapse — with claims-made cover, a gap strips protection from every year of past work at once, and “continuity of cover” questions follow you onto every future proposal. Get the renewal documents and your claims summary together, be ready to explain any notification, and give a specialist the time to work: the general sequence is on renewal increase: what to do, and the wider mechanics of rising premiums on why has my business insurance gone up?
Because the policy that pays is the one in force when a claim is made, not when the work was done. Each renewal, the insurer re-prices your entire back catalogue of work against its current view of your profession. When that view darkens — new patterns of claims across the market, or something in your own record — the price of carrying all those past years can move sharply in a single renewal.
A notification changes the underwriter’s picture of the risk even where nothing has been paid, because some notified circumstances do mature into claims. What you can control is context: what the circumstance was, why it arose, what you changed, and why it is unlikely to recur. Presented properly, an isolated notification with a clear story rates very differently from a bare entry on a claims summary.
Often, yes — the notified circumstance generally stays with the insurer on risk when it was notified, and a new insurer covers future claims arising from other work, typically excluding the known matter. It needs care with continuity and retroactive dates, which is exactly the kind of detail a specialist broker manages in the placement.
Only with your eyes open. Your limit should be driven by your contracts, your regulator or professional body’s requirements, and the realistic worst case of your work — not by this year’s premium. Cutting the limit below what your contracts require puts you in breach; cutting it below your real exposure saves premium by transferring the tail risk back to you.
Yes, in the form of run-off cover, because claims can be made years after the work was done. Professional negligence claims are generally subject to limitation periods measured in years — six years is the commonly cited baseline for contract claims, longer in some circumstances — and many professional bodies set their own run-off requirements. Run-off is priced for years of exposure with no new fees behind it, which is why it should be planned, not discovered.
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.
