Claim vs circumstance: what to notify a professional indemnity insurer, and when

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05

Professional indemnity (PI) cover behaves differently from most insurance a business buys. The trigger is not when the mistake happened, but when a claim is made against you or when you first become aware of a problem. That makes notification the single most important thing you do under the policy. Get it right and the insurer responds. Get it wrong and an otherwise valid claim can be declined. This guide explains the difference between a claim and a circumstance, the duty to notify, the deadlines, and what happens if you notify late.

Claim vs circumstance: the core distinction

The two terms are not interchangeable, and your policy will define each precisely. Always read the definitions in your own wording, but in general terms:

Examples of a circumstance include a client emailing to say your advice caused them a loss, discovering you missed a filing deadline, spotting a serious error in a report you issued, or receiving a complaint that hints at financial consequences. Nothing has crystallised into a formal demand — but the warning signs are there.

The distinction matters because notifying a circumstance early can protect you. If you report a circumstance to your current insurer and a claim later arises from it, the claim is treated as having been made during the policy year in which you notified — even if the actual claim lands years later, under a different insurer or after you have stopped trading. This is often the most valuable feature of PI cover.

Why "claims-made" changes everything

Almost all UK professional indemnity policies are written on a claims-made basis. This means the policy that responds is the one in force when the claim is made or the circumstance is notified — not the policy that was in force when you did the work or made the error.

Contrast this with the "occurrence" basis used for most liability insurance, where the policy in force at the time of the incident responds. Under claims-made, if you did the work in 2022 but a client sues in 2026, it is your 2026 policy that deals with it. That policy must be in force and must include an appropriate retroactive date that reaches back to cover the earlier work.

Two practical consequences follow. First, you need continuous cover — a gap between policies can leave old work unprotected. Second, notification is time-critical, because a claim or circumstance must be reported during the policy period in which you become aware of it. Wait until renewal and mention it on the new policy, and you may find neither insurer accepts it.

The duty to notify

Your policy imposes a condition — usually a condition precedent to the insurer's liability — that you notify any claim, and often any circumstance, as soon as reasonably practicable. Where notification is a condition precedent, complying with it is a prerequisite to the insurer having to pay. Miss it and the insurer may be entitled to decline the claim outright.

Separately, the Insurance Act 2015 governs how you present risk to your insurer. It requires a fair presentation of the risk when you buy or renew — disclosing every material circumstance you know or ought to know. If you are aware of a possible claim at renewal and fail to disclose it, you may breach that duty as well as your notification condition. In practice, known circumstances should be notified to your existing insurer before renewal, not quietly carried over.

Notification is not a sign of weakness or an admission of fault. Telling your insurer about a circumstance is exactly what the policy expects, and doing so does not mean you have accepted liability. What you must not do is admit liability, offer to settle, or agree to remedial work at your own cost without the insurer's consent — most policies prohibit this and doing so can prejudice cover.

Not sure whether something is notifiable? Speak to Apex before the deadline decides for you →

Deadlines: how soon is "as soon as possible"?

Most wordings require notification "as soon as reasonably practicable" or "as soon as possible" after you become aware of a claim or circumstance. That is deliberately not a fixed number of days — the standard is prompt action once you know. Some policies add a longstop: for example, that circumstances must be notified before the policy expires, or within a stated number of days of the policy ending.

In practice, treat the trigger as the moment you become aware, and act without delay. The safest approach is to notify the same week you learn of something, in writing, to the address or contact the policy specifies. Key points:

• Notify in the right period. Report during the policy year in which you became aware — do not save it for renewal.
• Notify to the right place. Use the notification route in your wording or schedule; a mention to your broker in passing may not count unless it reaches the insurer. Apex handles this on your behalf.
• Notify in writing, with detail. Include what happened, when, who is involved, and why it might give rise to a claim. Vague "blanket" notifications may be challenged.
• Keep the evidence. Retain the emails, letters or documents that first alerted you — they fix the date of awareness.

Consequences of late notification

Late notification is one of the most common reasons a PI claim is disputed or declined. The consequences depend on the wording and the facts, but broadly:

• Cover can be lost entirely. Where notification is a condition precedent to liability, failing to notify in time can allow the insurer to decline the claim, even a valid one.
• The wrong policy may respond — or none. If a circumstance you knew about at renewal is only notified later, your current insurer may say it was known and should have been disclosed, while the prior insurer says it was notified too late. You can fall into the gap.
• Disclosure problems compound it. A known-but-undisclosed matter at renewal can breach the duty of fair presentation under the Insurance Act 2015, giving the insurer remedies depending on whether the breach was deliberate, reckless or innocent.
• You lose control. Handling a matter yourself before notifying — admitting fault, offering money, doing free remedial work — can prejudice the insurer's position and your cover.

The Insurance Act 2015 did soften some historic harshness — for instance, insurers generally cannot avoid a whole policy for a genuinely innocent non-disclosure in the way they once could, and remedies are now proportionate to the type of breach. But those protections relate mainly to how you present risk. They do not rescue you from a clear breach of a notification condition. The reliable protection is simply to notify early.

A simple rule of thumb

If you are asking yourself "should I tell my insurer about this?", that hesitation is usually the answer — you probably should. Notifying a circumstance that never develops into a claim costs you nothing but a file note. Failing to notify one that does can cost you the claim. When in doubt, notify, and let the insurer and your broker judge it from there.

Larger or more complex risk? Speak directly to a director — call 0117 325 0027 or email info@apexinsurancebrokers.co.uk.

Common questions

Will notifying a circumstance push my premium up or count against me?
Notifying a circumstance is what the policy expects and protects you against future gaps in cover. On its own a precautionary notification that never becomes a claim is not the same as a paid claim, though insurers do consider your notification history at renewal. Not notifying, and then facing a declined claim, is far more damaging.

What if I only realise at renewal that I should have notified something?
Tell your broker immediately and notify your current insurer before the policy expires, not after. A known matter carried silently into a new policy year risks being both a late notification and a breach of the duty of fair presentation. Acting before renewal keeps it with the right insurer.

Does notifying mean I'm admitting I did something wrong?
No. Notification simply puts the insurer on notice of a possible claim — it is not an admission of liability. In fact you should not admit fault, settle, or promise remedial work without the insurer's consent, as doing so can prejudice your cover.

Talk to Apex about your PI cover →

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 reading your policy wording.