Once a claim is notified and accepted, professional indemnity policies usually give the insurer significant control over how it is handled. The claims control clause typically entitles the insurer to take over and conduct the defence or settlement of any claim in the insured's name, and to appoint solicitors of its choice. The insured, in turn, agrees to cooperate, provide information and not to prejudice the position. This allocation of control is a standard feature and shapes how a professional should behave from the moment a claim arises.
A near-universal condition prohibits the insured from admitting liability, settling, making any offer or incurring costs in connection with a claim without the insurer's consent. The purpose is to protect the insurer's ability to conduct the defence and to avoid the insured compromising a claim the insurer might have resisted. For a professional under pressure from an aggrieved client, this can feel counter-intuitive: the instinct to apologise or offer a fix must be balanced against the policy condition. An apology that amounts to an admission of liability can breach the wording and imperil cover, so firms should take the insurer's position before responding.
Because the insurer controls the defence, a professional could in principle be forced to fight, or to settle, against their wishes. The QC clause - now often called a senior counsel clause - moderates this. It typically provides that the insured need not contest, and the insurer need not require the insured to contest, any claim unless senior counsel (a King's Counsel or equivalent) advises that the claim can be contested with a reasonable prospect of success. It gives both sides an independent check before a matter is pushed to trial, which can protect a firm's reputation as well as its finances.
For professionals whose reputation is central to their livelihood, control of the claim is not a dry technicality. A surveyor or an adviser may care deeply about how a dispute is characterised and resolved. The claims control and QC clauses determine how much say they retain. Our guides to surveyors' PI insurance and IFA PI insurance explain how these clauses affect firms whose standing matters as much as the sum in dispute.
The practical approach is to engage the insurer early, resist the urge to respond directly to a claimant before doing so, and use the cooperation obligation as a two-way channel - the firm shares information, and in return has a voice in strategy. Where the QC clause is engaged, its independent test can be a useful brake on an insurer inclined to fight. Apex helps clients understand the conduct provisions before a claim arises and supports them in dealing with insurers once one does.
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.