The death, serious illness or incapacity of a partner mid-year sits at the intersection of partnership law, professional-body rules and the PI policy in force. The legal position needs to be established, the insurer notified promptly, and the surviving partners and the deceased partner's family supported with care. This entry sets out the framework Apex applies for professional firms.
Section 33 of the Partnership Act 1890 provides that, subject to any agreement between the partners, a partnership is dissolved by the death or bankruptcy of any partner. Most professional partnership agreements displace this default, providing that the firm continues between the surviving partners with the deceased partner's estate paid out over an agreed period. Where the agreement is silent, s.33 applies and the firm is technically dissolved at the moment of death — with real consequences for the PI position.
Whether the firm continues or dissolves determines the shape of the PI response. If the firm continues, the existing policy typically remains in force with an adjustment for composition. If it dissolves, run-off cover becomes the central question.
Every PI policy contains a duty to notify the insurer of material changes in firm composition. The death, ill-health retirement, or long-term incapacity of a partner is almost always material. Notification should be prompt and in writing, with the practical detail the insurer needs — date of the event, whether the firm continues or dissolves, the partner's practice area and share of the book, and any known circumstances arising from their historical work.
The insurer will review the risk and may adjust the policy — limits, retentions, or premium. Where the partner's book was substantial or specialised, the surviving partners should consider whether the limits remain appropriate.
Solicitors' firms in England and Wales operate under the SRA Indemnity Insurance Rules 2020, which require continuous cover on Minimum Terms and Conditions and specify a six-year run-off period on cessation. Where a firm continues after a partner's death, the SRA MTC framework generally accommodates the composition change without a break in cover, provided the insurer is notified and any endorsement issued.
Accountants regulated by the ICAEW sit under the ICAEW PII Regulations 2020, which impose their own minimum cover and run-off requirements. Architects registered with the ARB operate under the Architects Code, Standard 8 of which requires adequate and appropriate insurance arrangements. IFAs, surveyors and engineers have their own regulator-set frameworks. Profession-specific rules sit alongside the policy terms; both must be reviewed together.
Where the partnership genuinely dissolves — no successor practice, no continuing entity — run-off cover protects clients and the estate against claims arising from work done before cessation. Run-off periods vary by profession, typically six years or longer, and premiums are usually paid up-front and can be substantial.
Where the firm is restructuring rather than dissolving — the surviving partners continuing under a new composition — the existing policy generally responds to the deceased partner's historical work as part of the continuing firm's cover, provided the notification duty has been met and the policy renewed. The distinction matters and needs to be established early with the insurer.
FCA PRIN 2A imposes the Consumer Duty: acting in good faith, avoiding foreseeable harm, and supporting the customer's financial objectives. In a bereavement, the surviving partners and the deceased partner's family may meet the FG21/1 indicators of vulnerability — bereavement is a life-event driver, and acute distress affects the ability to engage with technical detail. Apex adjusts the journey accordingly: extended timescales, plain-English explanations, written summaries alongside verbal conversations, and, where the family requests it, direct engagement with the executor or a family representative with proper authority. See FCA FG21/1: vulnerable customers in PI broking for the wider framework.
Facts. A three-partner solicitors firm. One partner dies unexpectedly mid-year. The partnership agreement provides for continuation between the surviving partners, with the estate paid out over three years. The deceased partner handled property and private client work.
Broker steps taken by Apex. First, the insurer is notified in writing of the composition change and the continuation position, with the SRA MTC continuous cover requirement flagged. Second, policy limits are reviewed against the residual practice: the loss of the partner's book affects the mix of work, and the surviving partners are asked whether the current limits remain appropriate. Third, the position on the deceased partner's historical work is confirmed with the insurer — because the firm continues, the existing policy responds, but any known circumstances are notified in the ordinary way. Fourth, Consumer Duty and FG21/1 considerations are applied: extended timescales offered, communications set out in writing, and the surviving partners told they can pause the conversation at any point. Fifth, at the family's request, Apex meets the estate's executor to explain the PI implications for the deceased partner's legacy work and confirm that the estate's exposure sits behind the firm's continuing cover.
For profession-specific detail see the Apex pillar pages on solicitors' PI insurance, accountants' PI insurance, architects' PI insurance and IFAs' PI insurance.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.