Category: Insurance definitions · Reviewed by Mark Fox, Broker · Renewals · Last reviewed May 2026
A claims-made PI policy responds to claims first made against the insured during the policy period. An occurrence PI policy responds to claims arising from acts that occurred during the policy period, whenever the claim is made. The two cover triggers behave very differently at renewal, on insurer change, and after a firm ceases trading. Almost all UK professional indemnity is written on a claims-made basis.
The cover trigger is the test the policy uses to decide which year’s policy responds to a given claim. There are two main triggers in long-tail liability insurance:
Claims-made. The policy that responds is the one in force when the claim is first made against the insured (or when a circumstance is first notified). The work giving rise to the claim could have been done years earlier. The retroactive date on the policy bounds how far back the original work could have been performed and still be covered.
Occurrence. The policy that responds is the one in force when the act, error, omission or injury actually occurred. The claim may be made decades later, but it attaches to the policy that was in force at the time of the underlying act.
For PI, the UK market has settled overwhelmingly on the claims-made basis. The reason is essentially actuarial. Occurrence policies create open-ended liability for the insurer that extends decades after the policy year ends, and pricing that risk reliably for advisory and design work is difficult. Claims-made policies fix the insurer’s exposure to claims notified within the policy year, which makes the cover priceable and renewable.
A consequence is that PI cover does not “follow” the work in the way occurrence cover would. The cover is portable between policy years, but only if continuously renewed. Lapse the policy and the cover for past work stops.
Several practical features follow from the claims-made trigger:
By contrast, an occurrence policy — rare in UK PI but common in some general liability lines — would:
Consider a UK consultancy giving advice in March 2022. The advice turns out to be defective, and the client notifies a £450,000 claim against the firm in November 2026 — four and a half years later. The firm has bought PI cover continuously since starting practice in 2018.
Under a claims-made policy (the UK PI norm):
Under an occurrence policy (hypothetical for UK PI):
The structural implications matter to firms making decisions about renewals, run-off, and continuity of cover. In the UK PI market the question is almost always “is my current claims-made policy strong enough, with a wide enough retroactive date, and continuous from inception” — because that is the policy that will respond when a claim comes.
The claims-made vs occurrence distinction matters most:
At every renewal. Continuity of cover is the precondition for protection of past work. Any gap exposes the firm to uninsured old-work claims arising in the gap.
When changing insurer. The retroactive date on the new policy needs to be checked. A more restrictive retroactive date leaves part of the working history uninsured.
On ceasing practice. Run-off cover must be arranged. Without it, future claims arising from historic work have no policy to attach to.
On takeovers and restructures. Where one entity’s identity is dissolved into another, the claims-made cover does not automatically transfer. Either the acquirer’s policy is broadened or run-off is arranged for the original entity.
When deciding whether to notify a circumstance. A circumstance notification in the current policy year attaches potential future claims to that year’s cover, even if the claim itself does not crystallise until a later year. This can be valuable if the current cover terms are particularly favourable.
For long-tail professions. Construction, advice on long-life products, design work — anywhere the gap between the act and the claim can be many years — the claims-made structure puts pressure on continuous cover and on a long retroactive date.
The “claims-made” trigger itself comes in a few variants:
Occurrence cover in PI exists in a few specific contexts:
For UK regulated PI the practical assumption should be: the cover is claims-made unless the schedule says otherwise.
Is UK PI claims-made or occurrence?
UK professional indemnity is almost universally written on a claims-made basis. The policy in force when the claim is first made against the insured is the one that responds, regardless of when the underlying work was done. Occurrence PI exists in a few specialist contexts but is not the market norm. Schedules should be read to confirm, but for any standard UK PI policy the assumption is claims-made.
Why is claims-made the standard for PI?
PI claims often arise years after the underlying work — advice given in 2018 may not trigger a claim until 2026 or later. Occurrence cover would leave the insurer liable for unknown future claims arising from any policy year forever, which is hard to price reliably. Claims-made cover fixes the insurer’s exposure to claims notified during the policy year, which keeps the cover priceable and renewable.
What happens if I lapse my PI cover?
A lapse breaks continuous cover. Any claim notified during the lapse period attaches to no policy and is uninsured, even if the underlying work was done while the firm was previously insured. When fresh cover is arranged later, the retroactive date on the new policy may or may not bridge the gap. Lapses are one of the most damaging things a claims-made-insured firm can do.
Does claims-made cover claims I do not know about yet?
Yes — that is its point. The policy responds to claims first made against the insured during the policy period, regardless of when the underlying act occurred (provided the act was on or after the retroactive date). A firm with continuous claims-made cover and a long retroactive date is protected against latent claims that have not yet surfaced, so long as the cover continues to be renewed.
Does claims-made cover defence of regulatory action?
Whether regulatory defence costs are covered depends on the policy wording, not on the claims-made trigger itself. Many PI policies include a regulatory defence costs extension, typically as a sub-limit. The extension responds to defence of regulatory proceedings notified during the policy year, on the same claims-made basis as the main cover.
Can I move from claims-made to occurrence cover?
In UK PI this is rarely a practical option. The market does not offer occurrence cover as a routine alternative for most professions. Switching to a notional occurrence policy would create coverage gaps for past work performed under claims-made cover, because the claims-made policy stops responding to claims first made after its expiry. For most firms the right answer is to maintain claims-made cover continuously and arrange run-off when ceasing.
What is a circumstance notification?
A circumstance is a fact or event that may give rise to a claim. Most claims-made PI wordings let the insured notify a circumstance during the policy year, attaching any future claim arising from that circumstance to the current year’s policy. This is a key protection because it locks in the current policy’s terms even if the claim itself does not materialise until later. See circumstance notification.
Does claims-made cover transfer if I sell my practice?
Not automatically. The claims-made policy is the named insured’s policy. On sale, the cover is usually addressed in one of three ways: the buyer’s policy is extended to cover the acquired firm’s past work (with a suitably extended retroactive date), the seller arranges run-off cover for the historic exposure, or a combination of both. Brokers and lawyers should plan this before completion, not after.
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Apex Insurance Brokers Ltd is a Bristol-based insurance broker authorised and regulated by the Financial Conduct Authority (firm reference number 724952). The company is registered in England and Wales under Companies House number 07014570. Contact: info@apexinsurancebrokers.co.uk | 0117 325 0027.
Last reviewed: May 2026 by Apex Insurance Brokers Ltd.
Important: this article is general information, not advice on your specific circumstances. For advice on PI insurance for your firm, contact us on 0117 325 0027 or info@apexinsurancebrokers.co.uk.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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