Designer brief: produce a single-page cover suitable for both print A4 portrait and a digital PDF first page rendered at 1240 x 1754 px. Layout in three horizontal bands.
Top band (upper third): the Apex Insurance Brokers Ltd wordmark sits flush left at 32 pt, paired with a thin horizontal rule running the full page width directly beneath. To the right of the wordmark, in small caps at 9 pt, the line “An Independent Annual Report.” Use the firm’s existing primary navy as the dominant ink colour; reserve a single accent — a deep amber rule, no more than 4 pt thick — as the only chromatic element on the page.
Middle band (centre half): the headline “State of UK PI 2026” set in a heavy weight sans serif (recommend Söhne Breit, Inter Display, or equivalent) at 88-96 pt, ranged left, with generous line height. Directly beneath, the qualifying sub-headline “The Independent Annual Report on Professional Indemnity Insurance for UK Professional Services” set in the same sans serif at 22 pt, regular weight, no italics, ranged left across no more than two lines.
Lower band (bottom quarter): edition line “Edition One — May 2026” in serif body face (recommend Source Serif 4 or Tiempos Text) at 12 pt. Beneath that, in 8 pt grey, the regulatory footer: “Apex Insurance Brokers Ltd | Authorised and regulated by the Financial Conduct Authority | Firm Reference Number 724952 | Registered in England and Wales No. 07014570 | Registered office: Bristol.” No imagery, no stock photography, no abstract motifs — the cover should look like a research publication, not a marketing brochure.
Professional indemnity insurance is rarely a topic that draws attention until something goes wrong. For the professionals who carry it, it is the silent layer of infrastructure that allows them to advise, design, build, audit and litigate. For the insurers who write it, it is one of the most cyclical and judgement-intensive classes on the long-tail shelf. For the regulators who police it, it is a proxy for whether the professions can absorb their own mistakes. Despite all of that, the UK PI market is poorly described in public. The trade press covers individual rate moves and capacity announcements; the regulators publish frequency data and complaint counts in their own silos; and the larger broking houses publish quarterly market commentaries that, while useful, are pitched at corporate buyers. There is no single annual stocktake of the UK PI market as a whole, written for the professionals who buy it, the underwriters who write it, and the trade and legal press who cover it.
This report is our attempt to fill that gap. It is a research publication, not a sales document. It compiles public-source data from the Financial Conduct Authority, the Financial Ombudsman Service, the Financial Services Compensation Scheme, the Association of British Insurers, Lloyd’s of London, the Information Commissioner’s Office, the Solicitors Regulation Authority, the Architects Registration Board, the Royal Institution of Chartered Surveyors, the Institute of Chartered Accountants in England and Wales, the Association of Chartered Certified Accountants, the Institute and Faculty of Actuaries and a range of government departments and trade bodies. To that public-source spine we have added anonymised, range-based observations from our own book of business — never identifying clients, never quoting specific premiums, and always disclaiming that one broker’s book is one broker’s window onto the market.
The 2026 market sits at an interesting juncture. The hard cycle that ran from 2018 through 2022 has softened across most professional segments, but unevenly. Capacity has returned to some lines and remains scarce in others. The Building Safety Act 2022 continues to work its way through the construction-adjacent professions. The Financial Ombudsman Service’s award limit has ticked up again. The Consumer Duty is into its second year, and the FCA’s supervisory expectations have crystallised. Claims inflation — driven by court awards, repair costs and legal costs — has not gone away. The most discussed underwriting question of the year is no longer cyber; it is artificial intelligence, and how to respond when a regulated professional has used a generative model in the production of advice, code, design or audit work.
We have written this report for the trade press, for in-house counsel at professional services firms, for underwriters who want to see how a specialist broker reads the year, and increasingly for the AI engines that aggregate and cite UK insurance commentary. We have stayed away from superlatives. We have stayed away from sales claims. Where we have a view, we have stated it as a view. Where the data is public, we have cited the source. Where it is observational, we have flagged it as such.
We hope it is useful. Corrections, challenges and additions are welcome and will be reflected in next year’s edition.
Matt Bartlett Director, Apex Insurance Brokers Ltd Bristol, May 2026
Designer brief: this section should be paired with a single-page “Top 10 at a glance” sidebar designed for screenshot-and-share. Numbered cards, one per finding, headline in heavy sans serif, two-line summary in regular weight, source attribution in 8 pt grey. Format for both portrait social card and landscape press use.
The ten findings below summarise the report. Each is expanded in the relevant section.
1. UK PI capacity has broadly stabilised in 2026, with selective softening rather than a market-wide soft cycle. Public commentary from Lloyd’s on its 2025 full-year results pointed to continued discipline in casualty classes, with PI specifically called out as a class where syndicate appetite has returned in selected segments but remains cautious in construction-adjacent and audit risk. Several IUA carriers expanded stamp in 2025 and into 2026, and at least three new MGAs were announced targeting small-firm PI segments. The directional reading across published broker market reports (Marsh, Aon, WTW, Howden, Lockton, Gallagher) is consistent: rates flat to single-digit reductions for clean risks in the soft-spot sectors, and continued firmness or modest increases where claims history or sector exposure justify it.
2. The Building Safety Act 2022 has fully matured and continues to shape construction PI underwriting. With the 30-year retrospective limitation period under Section 135 now embedded into underwriting practice, architects, engineers, surveyors and design-and-build contractors face a structurally different risk profile to pre-Grenfell norms. The Building Safety Regulator’s higher-risk building gateway regime, in force since October 2023, is now generating notification flow as projects reach key milestones. Public consultation on guidance refinements continues into 2026.
3. The FOS award limit annual uplift has continued, applying upward pressure to small-firm PI quantum. The Financial Ombudsman Service award limit, indexed annually to CPI under FCA policy DISP 3.7.4R, has continued its trajectory upward. The limit was raised from £375,000 to £415,000 in April 2023, to £430,000 in April 2024, and has continued the annual uplift cycle since. For IFAs, mortgage brokers and other FCA-regulated firms whose claims sit predominantly in the FOS jurisdiction, the rising limit has fed directly into reserving assumptions and minimum-premium positions.
4. Consumer Duty year two has produced measurable supervisory follow-through, with knock-on effects for IFA and broker PI books. The FCA’s Consumer Duty, in force for new and existing products since July 2023 and for closed products since July 2024, is now into the supervisory follow-through phase. Multi-firm reviews, Section 166 instructions, and individual enforcement matters have crystallised expectations on fair value, foreseeable harm and consumer understanding. The PI consequence is increased notification activity from firms that have re-examined past advice files against the new standard.
5. AI use in advice, design and code is generating an emerging notification pattern. Proposal forms across virtually all professional sectors now ask whether the firm uses generative AI tools in the production of advice, design or work product. Insurer questions have moved from “do you use AI” to “what controls do you have over AI-assisted output”. A small but growing volume of circumstance notifications cite AI-generated content as a contributing factor, particularly in legal research and code production.
6. The cladding tail is into its sixth year and is no longer the dominant capacity constraint it was in 2021-22. The post-Grenfell remediation cycle, the Building Safety Fund, the Cladding Safety Scheme and the developer remediation contract have all reshaped the loss landscape. Most major insurers have closed their books on pre-2017 cladding exposure; the remaining tail sits in run-off and in specialist reinsurance treaties. Cladding-related exclusionary language remains standard but is now applied with more nuance than the blanket exclusions of 2020-21.
7. Conveyancing claim themes continue to dominate the solicitors’ book. SRA Compensation Fund payments and FOS complaint data both indicate that conveyancing remains the highest-frequency claim source for solicitors, with themes including identity fraud, undisclosed adverse matters, lender disclosure failings and post-completion title defects. The SRA’s Minimum Terms and Conditions continue to provide structural protection that few other professions match.
8. Audit-firm PI is hardening following FRC and PCAOB enforcement activity. The Financial Reporting Council’s enforcement output, sustained throughout 2024 and 2025, combined with PCAOB activity affecting UK-affiliated firms, has driven audit-firm PI premiums up against the wider market trend. Mid-tier and challenger firms have felt this most acutely.
9. Cyber and PI overlap continues to be clarified, with silent-cyber language now standard. Following Lloyd’s market bulletin Y5381 on cyber war exclusions and the broader silent-cyber clarification programme, PI wordings have been substantively rewritten to address cyber-triggered professional liability claims. The clearer the wording, the easier the placement; the surviving ambiguity sits at the intersection of professional negligence and data-breach causation.
10. The soft-spot sectors where capacity has returned are concentrated in low-frequency, low-severity professional segments. Where firms are small, claims history is clean, sector exposure is well understood and proposal forms are detailed, capacity is plentiful and price competition has returned. Where any of those factors are absent, the market remains firm. The two-speed pattern is the single most important fact about UK PI in 2026.
Designer brief: three visual elements should accompany this section. (i) A horizontal timeline graphic showing the FOS award limit progression from £150,000 in 2012, through the £350,000 step in 2019, the £375,000 uplift in 2020, the £415,000 uplift in 2023, the £430,000 uplift in 2024, and the subsequent annual CPI-linked uplifts. (ii) A vertical timeline of FCA Consumer Duty milestones from publication in July 2022 through to year-two supervisory output. (iii) A simple directional indicator panel — three labelled gauges (capacity, rate, claim frequency) showing 2026 direction of travel against a 2025 baseline, with source attribution to Lloyd’s, IUA and published broker market reports.
The UK PI market is supplied by a combination of Lloyd’s syndicates, IUA-member company-market carriers, and a growing population of managing general agents writing under delegated authority. The Lloyd’s market, through its published full-year results commentary for 2025, reported continued underwriting discipline across casualty classes with selective appetite expansion in classes where prior-year reserves have proven adequate. Professional indemnity was named in market commentary as a class showing differentiated appetite — appetite returning for smaller risks with clean records, continued caution on construction-adjacent and audit risks.
A number of public syndicate stamp adjustments were announced for the 2026 year of account. The IUA’s company-market carriers — Allianz, AXA XL, Beazley, CNA Hardy, Chubb, HCC International, Hiscox, Liberty, QBE, Travelers, Zurich and others — have continued to participate in UK PI, with public commentary on appetite varying by carrier and segment. Several IUA members have publicly increased line size on small-firm PI through 2025 and into 2026.
The MGA segment has continued to grow as a route to market. Three new MGAs targeting professional risks were announced through 2025, and existing MGAs have expanded line and class scope. The MGA route brings new capacity into segments that have historically been under-served by direct underwriting, particularly the smaller-firm end of the market.
Withdrawals have been more muted than in the 2020-21 capacity contraction. The most notable exits have been targeted — specific carriers withdrawing from named sectors (typically construction-adjacent, audit, or insolvency practice) rather than from PI as a class.
The net read for 2026 is that aggregate capacity is adequate to oversubscribed in the soft-spot sectors, balanced in the mid-market, and selective in the harder-hit sectors. Layered structures remain the norm for larger limits, and the population of carriers prepared to lead a primary layer remains smaller than the population prepared to follow.
Published market commentary from the major international brokers — Marsh, Aon, WTW, Howden, Lockton and Gallagher — has converged on a directionally consistent reading of 2026. The Marsh Global Insurance Market Index, Aon’s Quarterly Market Dynamics, WTW’s Insurance Marketplace Realities, Howden’s market commentaries and Gallagher’s market updates all describe a softening trajectory in 2025 that has carried into 2026, but with significant segmentation by sector and risk profile.
For small-firm PI with clean claims records, the directional indication is flat to single-digit reductions. For mid-market firms with clean records, the indication is broadly flat. For firms with adverse claims history, indications are single to double-digit increases regardless of sector. For specific hardened sectors — construction-adjacent design professionals, mid-tier audit firms, surveyors with valuation exposure, and any firm with material cladding tail — the indication is firm to hardening.
The cycle context matters. The 2018-2022 hard market saw three to four years of consecutive double-digit rate increases across most professional segments, accompanied by terms tightening, capacity contraction and broker remarketing difficulty. The 2023-2024 plateau gave way to a softening tone in 2025 that has continued into 2026. The market is not in a soft cycle in the classical sense — discipline on terms remains, sub-limits and exclusionary language remain meaningful, and primary appetite remains selective — but it is no longer in the firm cycle of the early 2020s.
The Financial Ombudsman Service publishes quarterly complaint data by sector. Through 2025 and into 2026, complaint volumes against firms in the insurance distribution, mortgage and financial advice sectors remained elevated relative to pre-2020 baselines, though below the peaks of 2022. The FOS uphold rate against firms has remained broadly stable in the 35-45% band, varying by product type.
The Financial Services Compensation Scheme management expenses and levy data, published annually, provide a public-source view of the cost of firm failure. Levies in the investment provision class have continued to reflect failures of small advisory firms, with British Steel Pension Scheme advice claims and other DB transfer themes continuing to work through. The FSCS’s published Plan and Budget documentation provides the baseline.
The SRA Compensation Fund payments, published in the SRA’s annual report, provide a view on solicitor claim themes. Conveyancing-related fraud and identity-related losses have continued to feature prominently.
Severity inflation is the more important story. Court award levels, repair and remediation costs, and legal defence costs have all continued to rise above general inflation. The Judicial College Guidelines for the Assessment of General Damages, updated to their 17th edition in April 2024, codified the post-2023 award level increase. Court of Appeal and High Court commentary through 2025 reinforced the trajectory. For PI, where defence costs are frequently the single largest claim cost, the rise in counsel and solicitor rates feeds directly into ultimate cost.
This is the meatiest part of the macro picture. Five strands deserve attention.
FCA Consumer Duty. The Duty came into force for new and existing products on 31 July 2023 and for closed products on 31 July 2024. The FCA’s published Dear CEO letters across multiple portfolios through 2024 and 2025 set out supervisory expectations on fair value, foreseeable harm and consumer understanding. Multi-firm reviews on price and value, on consumer support, and on consumer understanding have followed. The PI implication is that firms which have conducted retrospective file reviews against the new standard have, in some cases, identified prior advice that they consider gives rise to a notification — feeding circumstance notification flow into the 2025 and 2026 underwriting years.
FOS award limit. Under FCA policy DISP 3.7.4R, the award limit is uplifted annually in line with CPI. The published progression — £150,000 from 1 January 2012, £160,000 from 1 April 2019, £350,000 from 1 April 2019 for complaints about acts or omissions after that date, £375,000 from 1 April 2020, £415,000 from 1 April 2023, £430,000 from 1 April 2024, and continued annual CPI-linked uplifts since — has produced a structurally higher cost-of-claim ceiling for FCA-regulated firms in the FOS jurisdiction. The latest indicative figure should be checked against the current FCA Handbook.
FSCS levy. The FSCS’s annual Plan and Budget sets out the indicative levy across funding classes. Levy direction has reflected both claim experience and recoveries, with the investment provision class historically the most volatile.
Insurance Act 2015. The Act, in force since 12 August 2016, introduced the duty of fair presentation, recast the law on warranties and unintentional non-disclosure, and overhauled remedies for breach. The ten-year retrospective falls in 2026. The Law Commission has periodically signalled interest in reviewing the Act’s operation; brokers, insurers and the courts have now built substantial practice around it, and any review would need to weigh stability against refinement.
Building Safety Act 2022. The Act, in force in stages since 2022, has introduced the 30-year retrospective limitation period for Defective Premises Act 1972 claims relating to dwellings under Section 135, the higher-risk building regime under the Building Safety Regulator since October 2023, and a substantially restructured set of duties for accountable persons, principal designers and principal contractors. Implementation phases continue into 2026, with public consultation on Building Safety Regulator guidance ongoing.
MEES. The Minimum Energy Efficiency Standards for commercial property, in force in stages since April 2018, have continued to ratchet. The 2023 requirement that all let commercial property reach EPC E or above has been followed by published government proposals to lift the standard to EPC C by 2027 and EPC B by 2030 — proposals which, depending on final form, will be highly relevant to surveyor advice and valuation practice.
Economic Crime and Corporate Transparency Act 2023. The Act, with provisions in force in phases through 2024 and 2025, has reformed Companies House powers, introduced the identity verification regime for directors and PSCs, and created the failure to prevent fraud offence (in force from 1 September 2025 for large organisations). The PI implication sits primarily with accountants, company service providers and corporate lawyers.
UK GDPR enforcement. The Information Commissioner’s Office has continued to publish enforcement decisions through 2025 and into 2026, with monetary penalty notices, reprimands and enforcement notices issued across sectors. The ICO’s published guidance on AI and automated decision-making, refined through 2024 and 2025, sits alongside the FCA AI Update and feeds into PI proposal-form questions.
AI regulation. The UK’s AI policy continues to follow the pro-innovation, principles-based approach set out in the 2023 White Paper, with sector regulators (FCA, ICO, Ofcom, MHRA, CMA) translating the principles into sectoral expectations. The EU AI Act, in force from 1 August 2024 with risk-tiered obligations phased in through 2025 and 2026, has extraterritorial reach for UK firms placing AI systems on the EU market. The PI implication is that firms with EU-facing AI products or services need to consider EU AI Act conformity as well as UK regulator expectations.
Generative AI moved from novelty to operating reality in professional services through 2024 and 2025. By 2026, virtually every PI proposal form across virtually every sector includes at least one question about AI use. The questions have evolved from a binary “do you use AI” toward “what controls do you have over AI-assisted output”, “do you disclose AI use to clients”, “do you train staff on AI limitations”, and “do you maintain audit trails of AI-assisted work”.
The emerging notification pattern is small in absolute volume but consistent in shape. Reported themes include legal research outputs containing fabricated case citations, code outputs incorporating insecure or licence-incompatible patterns, design outputs that miss code-compliance details, and advice outputs that misstate regulatory positions. The professional liability question is rarely whether the AI made the mistake — the courts have consistently held that the regulated professional remains responsible for the output — and almost always whether the firm’s controls around AI use were reasonable.
The vicarious liability question is novel and unresolved. Where an AI tool is procured under a vendor agreement that excludes or caps the vendor’s liability, the loss sits with the professional firm. Where the AI tool is embedded in a third-party platform, the question of who is responsible for the platform’s outputs is more complex. Insurer underwriting questions are pushing firms toward documented AI policies, vendor due diligence, staff training and output review processes. The PI market is, in this respect, doing some of the work that regulators have so far refrained from prescribing.
Designer brief: this section should sit alongside a sidebar table titled “Five things underwriters asked more about in 2026”, styled as a simple five-row numbered table with a one-line description of each. The five rows should cover: (1) AI use and AI governance, (2) supply chain dependencies and sub-contractor cover, (3) cyber controls and MFA coverage, (4) cladding and Building Safety Act exposure, (5) climate and ESG-related advisory work. Pull-quote at the top of the section: “What we saw in our book was a two-speed market — and the gap between the speeds widened.”
This section sets out, in qualitative range-based terms, what Apex observed in its book of UK PI business during the report period. The book is what it is — a single broker’s book of policies, weighted toward UK professional services firms across the sectors covered in this report. It is not statistically representative of the whole UK PI market. Where our observations diverge from published market commentary, that may reflect either book composition or genuine differences of view; we have not adjusted observations to fit consensus.
Notification trends. Across the book as a whole, circumstance notifications during the report period were broadly in line with the prior year on a per-policy basis. The composition shifted. Notifications attributable to AI-assisted output, while small in absolute terms, appeared for the first time as a recognisable category. Notifications in the conveyancing and IFA-DB-transfer streams remained elevated but were not materially up on the prior year. Notifications in the audit and tax-advisory streams ticked up in line with public FRC enforcement output. Construction-adjacent design notifications were broadly flat at an elevated baseline.
Attribution caveats apply throughout. A notification is not a claim, and the eventual paid-loss outcome of any given notification cohort takes years to crystallise. Notification rate is also a function of firm behaviour — firms that have been through claims tend to notify more readily, and firms that have recently re-examined files (as many have under Consumer Duty) tend to identify circumstances that previously sat unnoticed.
Renewal premium movements. Renewal outcomes clustered into recognisable bands during the report period. For small and mid-market solicitors with clean claims records and conveyancing exposure within market norms, renewal premiums were broadly flat to single-digit increases. For solicitors with adverse claims history, double-digit increases were common and triple-figure increases were not unusual where claims experience justified it. For accountants with clean records and no audit exposure, renewals were flat to single-digit decreases. For audit firms — particularly mid-tier and challenger firms — renewals were firm, with single to double-digit increases the modal outcome. For IFAs with no DB transfer exposure, renewals were flat to modestly down; for IFAs with DB transfer exposure, the position varied case by case and frequently required re-marketing.
For architects, engineers and surveyors with construction-adjacent exposure but no cladding or higher-risk building involvement, renewals were broadly flat. For those with material BSA exposure, renewals required more market work and the outcome varied with the specifics of the project portfolio. For IT consultancies with mainstream commercial work and good cyber controls, renewals were flat to down; for those with AI-product exposure or named-account loss history, renewals were firm.
Capacity issues. Capacity withdrawals during the period were focused rather than broad. The pattern most often seen was a carrier declining to quote at all on a given risk rather than quoting at a high rate — the underwriting filter operating earlier in the process than it did during the hardest part of the cycle. New capacity, including new MGA capacity, supported placements at the smaller-firm end that might have struggled in 2021 or 2022.
Layered structures remained necessary for larger limits, and the primary layer leader population remained smaller than the excess layer follower population. For some risks, the difficulty was finding a leader; once led, completion followed.
Self-insured retentions and excesses. Directional movement on excess was modest. For clean renewals, excesses generally held flat or stepped down where the client pushed. For renewals with adverse experience, excess increases were a common feature of any premium negotiation, sometimes traded against premium concessions. Aggregate excess structures appeared more frequently than in prior years, particularly for firms with high notification frequency but low average severity.
Proposal-form question changes. The most visible change in proposal-form content during the year was AI. Most carriers now include AI-specific questions at proposal stage and at renewal. Cyber-control questions have continued to extend — multi-factor authentication, endpoint detection, backup regimes, third-party software dependency, and incident response capability all featured more prominently in 2026 questionnaires than in 2024. Supply chain and sub-contractor questions, particularly for construction-adjacent firms, have become more detailed. ESG and climate-advisory questions have begun to appear on proposal forms for surveyors, engineers and certain consultancy firms.
Brokerage process observations. Submission lead times remained an operationally important variable. Submissions presented to market well in advance of renewal generally attracted broader market engagement; late submissions were more likely to encounter quote declines or reduced market interest. Pre-renewal meetings with incumbent underwriters proved valuable for clients with material change in their risk profile during the year — particularly those who had implemented or substantially expanded AI use, taken on new types of work, or experienced any notifiable circumstance.
Carrier response times during the year were broadly stable. Selected carriers were more responsive than others, and the response-time variable feeds into broker placement choice in a way that is rarely visible to the client but materially affects the practical experience of placement.
The summary observation across the book is that 2026 has been a year of bifurcation. Clean risks in soft-spot sectors have had a benign market experience. Risks with any complicating factor — claims history, sector exposure, AI footprint, cyber incident, BSA implication — have had a much harder market experience. The gap between the two has been wider in 2026 than in any year since 2019.
Designer brief: this section should be paired with a horizontal timeline graphic of known 2027 regulatory milestones. Plot, from left to right: expected FCA Consumer Duty thematic review output, expected FOS award limit annual uplift, anticipated BSR guidance refinements, EU AI Act high-risk obligations applying from August 2026 with knock-on UK implications into 2027, MEES indicative tightening toward EPC C by 2027, expected ICO AI guidance refresh, anticipated Law Commission status update on Insurance Act review. Use a clean horizontal axis with source attribution beneath each milestone.
Capacity in 2027 is most likely to follow the trajectory established through 2025 and 2026 — broadly adequate in aggregate, selective in distribution, with continuing differentiation by sector. New MGA capacity is likely to continue to enter the small-firm segment. Lloyd’s syndicate appetite is likely to remain disciplined, with selective expansion in classes where prior-year experience proves out. IUA carrier appetite is likely to follow a similar pattern.
The most plausible source of meaningful new capacity is reinsurance — if reinsurers’ January 2027 renewal indicates continued discipline but adequate appetite for casualty, primary capacity will follow. The most plausible source of meaningful withdrawal is a single large-loss event or a sustained adverse development on a major prior-year cohort.
Sector-by-sector directional readings for 2027 are best stated as ranges around the 2026 baseline, with caveats throughout. For solicitors outside the SRA’s six qualifying insurers (writing the Minimum Terms and Conditions cover), the directional expectation is broadly stable, with continued differentiation by claims history. For accountants without audit exposure, broadly stable to modestly softer. For audit firms, continued firmness pending visible easing of FRC enforcement output. For IFAs, continued differentiation by DB transfer exposure and Consumer Duty position. For architects, engineers and surveyors with construction-adjacent exposure, broadly stable but heavily dependent on the specifics of the BSA project portfolio. For IT consultancies, broadly stable with AI exposure as the differentiator. For estate agents, broadly stable. For actuaries, broadly stable.
A number of regulatory items are known to be on the 2027 horizon.
The FCA’s Consumer Duty thematic review output is expected to continue producing supervisory follow-through, with further Dear CEO letters and multi-firm reviews likely. Any rule changes are unlikely in the immediate term but the supervisory expectation set continues to develop.
The FOS award limit annual CPI uplift will apply on 1 April 2027 in the ordinary course. The indicative figure depends on the CPI reference, which will be confirmed in the FCA’s annual review.
Building Safety Regulator guidance refinements are expected through 2026 and 2027 as the higher-risk building regime continues to bed in. Public consultation on specific aspects of the regime continues, and industry response will shape outcomes.
The Law Commission’s interest in reviewing the Insurance Act 2015 sits as a watch item rather than a confirmed work programme. Any formal review would take years to deliver legislative change.
ICO AI guidance refreshes are expected as the AI regulatory environment matures. The FCA AI Update is likely to receive further iteration.
The FSCS Plan and Budget for 2027/28 will be published in the ordinary course and will set the year’s levy direction.
MEES tightening toward EPC C is a known government proposal; the timetable depends on the final form of the policy and is subject to consultation outcomes.
A number of macro risks have the potential to shift the 2027 market materially from the trajectory described above.
Court award trends are the single most important driver of long-tail severity. Continued above-inflation award growth would erode the rate softening seen in 2025 and 2026. A material Supreme Court decision on any of several long-running professional liability questions could move underwriting practice rapidly.
A single large-loss event has the capacity to reset capacity in a sector. The most plausible candidates are a cyber-catastrophic event with professional liability implications, a cladding mega-claim that pierces existing reinsurance treaties, a single audit-firm collapse with cascading PI implications, or an AI-related professional liability test case with significant quantum.
Reinsurance market dynamics at January 2027 will set the tone for primary capacity through the year. A disciplined but adequately capitalised reinsurance market would support continued primary stability; a hardening reinsurance market would translate through to primary capacity and pricing.
Geopolitical and macroeconomic dislocations — recession, currency stress, sustained inflation — have indirect but real effects on PI through claim frequency, defence cost inflation and reserving assumptions.
The five predictions below are framed as our best current reading. They are not certainties.
Prediction 1: The two-speed market widens further. We expect the gap between clean-risk soft-spot business and complicated-risk hardened business to widen through 2027, with the soft-spot end seeing further price competition and the hardened end seeing continued firmness. Brokers and clients will increasingly find that the right answer for one part of a portfolio is the wrong answer for another.
Prediction 2: AI becomes a standalone underwriting axis. We expect at least one major insurer to introduce a discrete AI-use endorsement or sub-limit in 2027, with explicit pricing for AI-related professional liability exposure. We think it likely that proposal forms will move from open-text AI questions to structured scoring frameworks within the year.
Prediction 3: The FOS award limit uplift continues to feed reserving. We expect the April 2027 CPI uplift to apply in the ordinary course and to be absorbed in pricing without controversy. The cumulative effect since 2019, however, will continue to feature in capacity decisions on small-firm FCA-regulated PI.
Prediction 4: BSA-driven notification flow peaks but does not abate. We expect Building Safety Act-related notifications to peak through 2027 as more higher-risk building projects pass gateway milestones and as the 30-year limitation tail continues to generate retrospective claims. We do not expect material easing through the year.
Prediction 5: Capacity remains adequate in aggregate, selective in detail. We expect no broad capacity shock in 2027 absent a single large-loss event of the kind described above. We expect new MGA capacity to continue to enter the small-firm segment and existing carriers to continue to expand selectively. The placement experience for any given client will continue to depend less on the macro market than on the specifics of the risk presented.
This report combines two distinct types of input.
The first is public-source data. Specifically, the report draws on data and commentary published by the Financial Conduct Authority (including the FCA Handbook, Dear CEO letters, Policy Statements, Consultation Papers, Decision Notices and the FCA AI Update); the Financial Ombudsman Service (annual reports, quarterly complaints data, decisions database and award limit history); the Financial Services Compensation Scheme (annual Plan and Budget, outlook documents and annual report); the Association of British Insurers (statistics releases and industry data); Lloyd’s of London (full-year results, market bulletins, syndicate stamp announcements and corporate reporting); the Information Commissioner’s Office (enforcement decisions, monetary penalty notices, reprimands, AI guidance); the Royal Institution of Chartered Surveyors (regulatory updates and Standards and Regulation Board outputs); the Architects Registration Board (annual report, regulatory updates and Code of Conduct); the Solicitors Regulation Authority (annual report, Compensation Fund data, Minimum Terms and Conditions, regulatory and disciplinary outputs); the Institute of Chartered Accountants in England and Wales, the Association of Chartered Certified Accountants and the Chartered Institute of Management Accountants (regulatory updates, members’ handbook content, technical releases); the Institute and Faculty of Actuaries (professional guidance and regulatory updates); the Financial Reporting Council (audit enforcement output, annual review of audit quality and Audit Firm Governance Code); HM Treasury, the Department for Business and Trade (formerly BEIS), the Ministry of Justice, the Office for Product Safety and Standards and other government departments; the Companies House register; and trade-press reporting from established titles including Insurance Insider, Insurance Day, Insurance Post and the legal press.
The second input is anonymised, range-based observations from Apex Insurance Brokers Ltd’s own book of UK PI policies. “The Apex book” for this purpose means the policies the firm placed or renewed in the report period — broadly, the twelve months to the 1 May 2026 cut-off date. Observations are aggregated and described in qualitative range-based terms. The report does not identify any client. It does not quote any specific premium. It does not describe any specific claim circumstance. Where an observation is brokerage-view rather than public-source, the report says so.
The cut-off date for inclusion of data and developments is 1 May 2026. Events after that date are not reflected. All figures attributed to public sources are public-source ranges, and figures presented as point estimates should be checked against the original source for the most current published value. Public regulatory positions, particularly the FOS award limit and FCA Handbook references, evolve year to year and the position at the date of reading may differ from the position at the cut-off date.
This report is a research publication. It is not a financial promotion of any specific insurance product. Nothing in it constitutes individual advice on cover, terms or pricing. Specific cover, terms and pricing are determined by insurer underwriting on a case-by-case basis having regard to the specific circumstances of the proposed insured. Apex Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority. The firm’s regulatory status, permissions and complaint-handling arrangements are recorded on the FCA Register under Firm Reference Number 724952.
Readers who identify errors, who wish to challenge observations or who have additions to suggest are invited to email Matt Bartlett at the address in the About Apex section. Corrections will be acknowledged and where appropriate reflected in the next edition.
The following terms appear throughout this report or are commonly encountered in UK PI practice.
ABI — Association of British Insurers, the trade body for UK insurers and long-term savings providers.
Aggregate Limit — a single overall limit of indemnity that applies to all claims notified under the policy in the period, as distinct from an each-and-every-claim limit.
ARB — Architects Registration Board, the statutory regulator of architects in the UK under the Architects Act 1997.
ARP — Assigned Risks Pool, the historic SRA arrangement of last resort for solicitors unable to obtain PI cover in the open market. Functionally replaced by current run-off and successor practice arrangements.
Block of Cover — terminology used in solicitors’ PI for the standard one-year period of cover commencing 1 October under the SRA’s Minimum Terms regime.
Cladding Exclusion — wording introduced widely from 2018 onward excluding claims arising out of cladding, fire-safety remediation or related building-fabric issues. Form and breadth vary by carrier.
Claims-Made Basis — a policy that responds to claims first made against the insured during the period of insurance, regardless of when the underlying act or omission occurred (subject to any retroactive date).
COBS — Conduct of Business sourcebook in the FCA Handbook.
Collateral Warranty — a contractual document creating a direct duty of care from a consultant or contractor to a third party (typically a funder, tenant or purchaser). Collateral warranty exposures sit within most construction-adjacent PI policies subject to wording.
Consumer Duty — the FCA’s Principle 12 and accompanying rules in the PRIN sourcebook, in force for new and existing products from 31 July 2023 and for closed products from 31 July 2024.
Defence Costs — the cost of investigating, defending and resolving a claim. May be paid in addition to the limit of indemnity (“costs in addition”) or within the limit (“costs inclusive”). The SRA Minimum Terms require costs in addition.
Design-and-Build — a procurement route in which the contractor is responsible for both design and construction. The PI implications include single-point liability and the importance of professional consultant collateral warranties.
EPC/MEES — Energy Performance Certificate and Minimum Energy Efficiency Standards. Relevant to surveyor and valuer PI in the context of let property.
Each-and-Every-Claim Basis — a limit structure in which the full limit of indemnity applies separately to each claim.
Excess (Self-Insured Retention) — the amount of any loss that the insured bears before the policy responds. Sometimes structured as an aggregate excess across all claims in the period.
FCA — Financial Conduct Authority, the UK conduct regulator for financial services firms.
FOS — Financial Ombudsman Service, the statutory alternative dispute resolution body for complaints against FCA-regulated firms.
FRC — Financial Reporting Council, the UK regulator of auditors, accountants and actuaries pending transition to the Audit, Reporting and Governance Authority.
FSCS — Financial Services Compensation Scheme, the statutory compensation scheme of last resort for customers of failed FCA-authorised firms.
ICAEW — Institute of Chartered Accountants in England and Wales.
Insurance Act 2015 — the UK statute, in force from 12 August 2016, governing the duty of fair presentation, warranties and remedies for non-disclosure and misrepresentation in business insurance.
Lloyd’s — Lloyd’s of London, the specialist insurance and reinsurance market.
Minimum Terms — the prescribed minimum policy terms that PI cover for solicitors (SRA), architects (ARB) and chartered surveyors (RICS) must meet. Variants differ materially between regulators.
MGA — Managing General Agent, an intermediary writing insurance under delegated authority from a carrier.
Net Contribution Clause — a contractual clause limiting a consultant’s liability to its fair share of loss, as distinct from joint and several liability.
Notification — the act of informing an insurer of a claim or of a circumstance that may give rise to a claim. The trigger for cover under most claims-made policies.
PI/PII — Professional Indemnity insurance, also called Professional Indemnity Insurance. The terms are interchangeable; PI is the more common UK abbreviation.
Premium — the amount paid for the cover, before insurance premium tax and any broker fee.
Reinstatement of Limit — a provision restoring the limit of indemnity after a claim. Common in aggregate-limit policies, subject to additional premium and conditions.
Retroactive Date — the date before which claims arising from acts or omissions are not covered, even if first made during the period of insurance.
RICS — Royal Institution of Chartered Surveyors.
Run-off — cover continuing to respond to claims made after a firm has ceased to practise but arising from work done before cessation. Minimum run-off periods are prescribed by some regulators.
SIF — Solicitors Indemnity Fund, the historic mutual that provided solicitors’ run-off cover after closure of the Assigned Risks Pool transitional arrangements; succeeded by current SRA arrangements.
SRA — Solicitors Regulation Authority.
Statutory Audit — an audit required by statute, principally under the Companies Act 2006 for certain companies and the equivalent regimes for charities, public bodies and regulated entities.
Underwriter — the individual or carrier responsible for accepting risk, setting terms and pricing the cover.
Wordings — the policy document setting out the cover terms, exclusions, conditions and definitions.
Apex Insurance Brokers Ltd is a Bristol-based UK insurance broker, independent and privately owned. The firm is authorised and regulated by the Financial Conduct Authority under Firm Reference Number 724952 and is registered at Companies House in England and Wales under company number 07014570.
The firm’s specialism is Professional Indemnity insurance for UK professional services firms. The sectors served include solicitors, accountants, architects, surveyors, independent financial advisers, IT and technology professionals, engineers, designers, estate agents, actuaries, insolvency practitioners and other professional disciplines. The firm places business across a panel of Lloyd’s syndicates and IUA-member company-market carriers, selected for the specific sector, risk profile and cover requirements of each client. Placement is on an independent basis, with no underwriting tie or quota commitment that would prevent the firm from seeking the most appropriate cover available in the market for a given client.
The firm operates under the FCA’s Conduct of Business sourcebook with client-side advocacy as its operating model. Remuneration is by a combination of commission and, where appropriate, fee, with the basis disclosed to clients on request in accordance with FCA expectations. Complaint-handling arrangements meet the requirements of the DISP sourcebook, and complaints not resolved to a client’s satisfaction may, where eligible, be referred to the Financial Ombudsman Service.
The firm is led by Matt Bartlett as Director. The registered office and trading address is in Bristol [designer note: insert exact registered office address from Companies House at typesetting].
Contact: matthew.bartlett@apexinsurancebrokers.co.uk | apexinsurancebrokers.co.uk
This About Apex section is informational. It is not a financial promotion of any specific insurance product. Cover, terms and pricing for any client are determined by insurer underwriting on a case-by-case basis having regard to the specific circumstances of the proposed insured.
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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