PI insurance when acting as a UK arbitrator

Arbitrating in the UK is generally protected by statutory immunity under the Arbitration Act 1996 — but the immunity is narrow, and appointment-specific claims still arise. This page sets out how PI insurance responds to arbitrator claims and what UK arbitrators typically hold.

The immunity framework

1. Arbitration Act 1996 section 29. Arbitrators are not liable for anything done or omitted in the discharge of their functions as arbitrator unless the act or omission is shown to have been in bad faith.
2. Institutional rules (LCIA, ICC, LMAA, CIArb) typically reinforce the immunity within the institutional framework.
3. Ad hoc arbitrations not subject to institutional rules rely on the statutory immunity plus contractual arbitration agreement terms.
4. Not absolute. Bad-faith allegations, procedural challenges, and claims arising outside the arbitrator's functions can pierce the immunity.

Why PI cover is still needed

1. Defence costs. Immunity protects from liability but not from being sued. Defence costs on a challenging claim can be material even where the ultimate defence succeeds.
2. Bad-faith allegations. Where the challenger alleges bad faith, immunity doesn't engage until proven. PI defends the arbitrator during proceedings.
3. Non-arbitral functions. Where the arbitrator's work extends beyond the strict arbitration function (settlement facilitation, expert determination bundled with arbitration), immunity is narrower.
4. Procedural challenges. Applications to remove an arbitrator under section 24 of the Arbitration Act still require defence.
5. Post-award claims. Setting aside proceedings, jurisdiction challenges — all require defence engagement.

Cover for arbitrators

1. Standalone arbitrator PI is available but a small specialist market.
2. Extension of underlying PI is common where the arbitrator is also a practising solicitor, barrister, engineer or other professional — the underlying policy typically extends to arbitration activity.
3. Institutional cover where the arbitrator is appointed under an institutional scheme — some institutions provide cover for their appointees.
4. Cover limit typically £1m-£5m per claim; higher for large-value commercial arbitration.

Common claim triggers

1. Bad-faith allegation. Rare but material — defending the immunity is the arbitrator's primary need.
2. Section 24 removal application. Party alleges lack of impartiality or misconduct.
3. Section 68 challenge. Serious irregularity in award.
4. Section 69 appeal. On point of law.
5. Non-arbitral function claims. Where the arbitrator's scope extended beyond arbitration.
6. Third-party claims. Rare, arising from ancillary aspects of the arbitration.

Getting cover in place

1. Confirm whether underlying professional PI extends to arbitration activity.
2. Where standalone arbitrator cover is needed, engage specialist broker — small specialist market.
3. Institutional appointments — check institutional cover position.
4. Ad hoc appointments — individual cover essential.
5. Discuss with institutional secretariat for guidance on cover expectations.

Frequently asked

Related reading

• PI when acting as a mediator
• Solicitors sector pillar
• Expert witnesses PI sector pillar
• Insurance Act 2015 fair presentation