Limit exhaustion · PI
What happens when your PI limit is exhausted
Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited (FCA FRN 724952) · Published 15 July 2026
PI aggregate exhaustion is rare but catastrophic when it happens. Understand the mechanics before you're in that position.
What 'exhausted' actually means
Aggregate limit reached — all further claims uninsured for the policy year.
Reinstatement (automatic or purchasable) can restore the limit.
Without reinstatement, the firm is uninsured for further claims until renewal.
Business-continuity implications are material.
Reinstatements — the primary recourse
- Automatic reinstatement: some policies include, limited number of occurrences.
- Purchased reinstatement: available at cost (typically 50-100% of original premium per reinstatement).
- Requires insurer engagement mid-year.
- Broker involvement essential for timely arrangement.
- See our aggregate reinstatements page for detail.
What to do immediately
- Contact broker within hours of realising exhaustion is imminent.
- Notify insurer of the situation.
- Assess whether reinstatement is available.
- Consider top-up cover from another insurer if reinstatement isn't possible.
- Document the impact and business-continuity plan.
- Communicate with clients where regulatory obligations require.
Regulatory implications
- Solicitors: SRA MTC continuous cover obligation — exhaustion doesn't automatically violate but can trigger notification.
- Architects: ARB Standard 8 adequate cover — exhausted cover isn't adequate.
- IFAs: FCA notification for material change may apply.
- Other regulated professions: sector-specific obligations.
Prevention — what should happen at placement
- Aggregate limit sized to reflect worst-case single-claim exposure.
- Multiple reinstatements built into wording where appropriate.
- Layered programmes for larger firms with concentrated exposure.
- Regular review of aggregate adequacy against portfolio.
Frequently asked
Can insurers refuse reinstatement?
Yes — particularly if the firm has multiple claims signalling ongoing risk. But most standard cases allow reinstatement at cost.
Does exhaustion void the policy?
No — the policy continues but with no aggregate remaining. Reinstatement restores it.
What if a further claim arrives after exhaustion?
Uninsured — firm bears the loss unless reinstatement has been arranged before the claim arrives.
How much is a reinstatement?
Typically 50-100% of original annual premium per reinstatement. Cheaper than exposure.
Should we always have reinstatements?
For firms with concentrated exposure or multi-client claim risk, yes. For simpler risks, less critical.
Does exhaustion affect renewal?
Yes — insurers rate exhausted years significantly higher.
Related
- Aggregate limit reinstatements UK
- Aggregate limit vs each-and-every claim PI
- Sizing your PI limit decision framework
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. Registered in England and Wales, company number 07014570.
Offices: QCS, 53 Queen Charlotte Street, Bristol BS1 4HQ · Unit 24, Basepoint Centre, Jubilee Close, Weymouth DT4 7BS