What is a proposal form, and why it matters for your professional indemnity

Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05

What a proposal form actually is

A proposal form (sometimes called a proposal, application or presentation) is the questionnaire an insurer uses to understand your business before agreeing to insure it. For professional indemnity, it typically asks about your activities, fee income or turnover, the split of work between service types, your clients, your claims and complaints history, and the limit of indemnity you want.

The insurer does not know your business — it knows only what you tell it. So the proposal form is the foundation the whole policy is built on. The insurer prices the risk, decides whether to offer terms, and drafts the contract based on the picture you paint. Increasingly this happens through an online form rather than a paper document, but the legal weight of your answers is exactly the same.

How the form drives your cover

The proposal isn't just admin — it is the source material for the contract. Here is how what you write flows into what you get.

• The premium. Turnover, activities and claims history are the main levers underwriters use to price PI. Understate them and the premium looks cheap, but the cover may not respond as you expect.
• The scope of cover. Insurers usually cover the professional activities you declare. Work you don't mention — a new service line, a different sector, higher-value contracts — may fall outside the policy.
• Terms, conditions and exclusions. Your answers can trigger specific conditions or exclusions, for example around particular client types, overseas work, or known circumstances.
• The limit of indemnity. You choose the ceiling on what the insurer will pay — commonly offered as generic options such as £1m, £2m or £5m — and the proposal is where you set it against the risk you actually carry.

In other words, an accurate proposal buys you cover that matches your business. A vague or optimistic one buys you a policy that may not be there when you claim.

The duty of fair presentation

Because professional indemnity is almost always bought by a business rather than a consumer, it falls under the Insurance Act 2015. That Act imposes a duty of fair presentation on the insured. You must:

• disclose every material circumstance you know or ought to know — a material circumstance is one that would influence a prudent insurer's judgement on whether to insure you and on what terms; or
• give the insurer enough information to put a prudent insurer on notice that it needs to ask further questions; and
• make that disclosure in a clear and accessible way, in good faith, without burying key facts in a data dump.

Crucially, "ought to know" covers information reasonably available to your business — not just what happens to be in one person's head. That means a "reasonable search" of your own organisation, so a partner's knowledge of a brewing dispute can't simply be ignored because the person filling in the form wasn't told.

If your PI is arranged as a genuinely personal, consumer policy instead, the Consumer Insurance (Disclosure and Representations) Act 2012 applies and the duty is lighter — you must take reasonable care not to make a misrepresentation — but for the vast majority of professionals buying PI, the Insurance Act 2015 is the governing regime.

What happens if you get it wrong

The Insurance Act 2015 replaced the old all-or-nothing rule with proportionate remedies. What the insurer can do depends on the type of breach and, for non-deliberate breaches, on what it would have done had you presented the risk fairly.

The practical danger is the middle and bottom rows. You may believe you have £2m of cover, then discover at claim time that a genuine but careless mistake on the proposal means the insurer pays only a fraction — a shortfall you fund yourself. That is why the proposal deserves real care, not a rushed tick-box exercise.

Completing a PI proposal well

• Answer the exact question asked — and if a question is ambiguous, say what you understood it to mean.
• Run a reasonable search of your business. Ask the people who would know about disputes, complaints, or circumstances that might lead to a claim.
• Disclose known circumstances, not just formal claims. A client threatening to sue, or an error you've spotted, is usually material.
• Describe your work accurately, including new services and one-off projects outside your usual scope.
• Keep a copy of what you submitted, so both sides know exactly what was presented.
• Tell your broker about mid-term changes. A material change during the policy year may need disclosing too.

If anything is unclear, a broker can help you frame the presentation so it is both accurate and fair. You can start a PI proposal with Apex here and we'll flag anything that needs a second look.

Common questions

Is an online quote form the same as a proposal form?

Yes. Whether you answer on paper, a PDF or a web form, the questions form your presentation of the risk and your answers carry the same legal weight under the Insurance Act 2015.

Do I have to disclose things the insurer didn't ask about?

Under the duty of fair presentation you must disclose material circumstances you know or ought to know, or at least give the insurer enough to prompt further questions. So don't rely only on the questions in front of you — if something would clearly affect the risk, raise it.

What is a "material circumstance"?

Anything that would influence a prudent insurer's decision to take on the risk or the terms it sets — for example your claims history, known disputes, the nature of your work, or a significant change in turnover.

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.