What is a circumstance versus a claim, and when do you notify?
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
Most professional indemnity (PI) policies in the UK are written on a claims-made basis. That single fact drives everything about notification. Cover is triggered by when a claim is made against you or notified to insurers during the policy period — not by when you did the work. Get the timing of notification right and the policy responds. Get it wrong, and an otherwise valid claim can fall outside cover.
The practical problem is that trouble rarely announces itself as a formal claim. It usually starts as a phone call, an angry email, or a quiet realisation in your own team that a piece of work was flawed. Knowing which of those to notify — and how — is the difference between a smooth claim and an argument with your insurer.
The two definitions, in plain terms
Your policy wording will define both terms precisely, and the exact words matter, but in practice they break down like this.
| A claim usually means... | A circumstance usually means... |
|---|---|
| A written or oral demand for compensation or damages | Any incident, event or matter you are aware of that may reasonably be expected to give rise to a claim |
| An assertion that you breached a professional duty | A mistake spotted internally before the client has noticed |
| The issue of court proceedings or a letter of claim | A complaint or hint of dissatisfaction that has not yet become a demand |
The key distinction is the presence of a demand. If someone is asking you to put your hand in your pocket, or alleging you owe them something, you almost certainly have a claim. If nobody has demanded anything yet but you can see how they might, you have a circumstance.
Why notifying a circumstance protects you
This is the part that catches people out. Notifying a circumstance is not an admission of fault, and it is not a nuisance to your renewal — it is how you lock the matter into the right policy year.
Most PI wordings contain a deeming provision. When you validly notify a circumstance during the current policy period, any claim that later arises from it is treated as if it were made during that same period — even if the actual claim lands two or three years later, long after you have changed insurer. In effect, you crystallise cover under the policy that is on risk today.
Without that notification, the claim attaches to whichever policy is live when the demand eventually arrives. By then your limit, excess, insurer or terms may have changed — or a new insurer may exclude the matter because you already knew about it when you renewed. Notifying early takes that uncertainty off the table.
Not sure your current PI limit or notification terms still fit your work? A quick review now is far cheaper than a coverage dispute later.
Get a PI quote →A simple decision path
When something feels wrong, work through it in order rather than waiting to see if it blows over:
- Has anyone demanded money or alleged you were at fault? If yes, treat it as a claim and notify immediately. Do not respond to the substance, admit liability or agree to remedial work first — that can prejudice cover.
- No demand yet, but could this reasonably lead to one? If yes, notify it as a circumstance. The test is whether a reasonable professional would foresee a possible claim, not whether you think you will win.
- Genuinely trivial with no realistic prospect of loss? Record your reasoning, but if in any doubt, notify. The cost of an unnecessary notification is close to nothing; the cost of a missed one can be the whole claim.
When you are unsure which side of the line you are on, that uncertainty is itself a reason to speak to your broker. We would far rather log a precautionary notification than defend a declinature.
The cost of late or missing notification
Notification clauses are often drafted as a condition precedent to the insurer's liability. In plain English: if you do not notify as the policy requires, the insurer may be entitled to decline the claim entirely, regardless of its merits. "As soon as reasonably practicable" means what it says — days and weeks, not months.
There is also a wider duty to be candid. Under the Insurance Act 2015, business policyholders owe a duty of fair presentation of the risk at inception and renewal. If you knew about a circumstance and did not disclose it when you renewed, you risk problems both with the notification and with the policy as a whole. Notifying promptly keeps you the right side of both obligations.
Some regulated professions have stricter regimes layered on top. Solicitors, for example, are covered under the SRA's Minimum Terms and Conditions, and bodies such as RICS and ICAEW set their own PI requirements. Your specific wording and any regulator rules always take precedence over general guidance like this — read them, or ask us to.
How to notify well
Good notifications share a few features. Put it in writing to the address in your policy schedule. Describe the facts, the work involved, the parties, the dates, and why a claim might follow — and identify the potential quantum if you can. Keep it factual and avoid speculating about your own liability. Then keep a copy and a record of when you sent it.
If you notify through Apex, we handle the routing to insurers and make sure the notification is logged against the correct policy year. That record is what a deeming provision relies on years down the line. You can also start a PI enquiry or review your notification terms here if you want to check your wording before anything goes wrong.
Common questions
Will notifying a circumstance push my premium up at renewal?
A precautionary notification that resolves with no payment usually has limited effect. What genuinely damages a renewal is a claim that surfaces after you failed to notify a circumstance you clearly knew about. Underwriters view early, honest disclosure far more favourably than a surprise.
A former client sent an angry email but hasn't asked for anything — claim or circumstance?
If there is no demand for money or damages, it is a circumstance rather than a claim — but it is one you should notify, because it plainly could develop into a claim. Do not reply admitting fault or offering to fix the work before speaking to your broker or insurer.
What if I only realise now that work done last year was wrong?
Notify it as a circumstance to your current insurer as soon as you become aware, even though the work predates this policy. On a claims-made policy it is the date of your awareness and notification that matters, not the date of the original work.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.