Notification of circumstances under PI

Reviewed by Matthew Bartlett, Director · Last reviewed 2026-06-23

"Notification of circumstances" is the mechanism by which a UK PI policyholder protects future cover for matters that have not yet ripened into formal claims. Get it right and a future claim attaches to the policy in force at the notification date. Get it wrong and the future claim is uninsured or attaches to the wrong policy year. This entry reviews the leading UK case law.

What a "circumstance" is

The Insurance Act 2015 doesn't define "circumstance" for PI purposes. The standard policy definition is something like: "any matter which the insured becomes aware of and which a reasonable professional would consider may give rise to a claim". The case law tests how that definition operates in practice.

HLB Kidsons (a firm) v Lloyd's Underwriters [2007] EWHC 1951 (Comm)

The leading first-instance authority on circumstance notification. The Kidsons firm purported to notify a wide class of "circumstances" arising from a tax planning scheme that was potentially defective. The judge held:

• A circumstance notification must be specific enough that the insurer can understand what is being notified
• A "blanket notification" covering an indeterminate class of work is not effective
• The insured must identify what gives rise to the prospect of a claim — vague references to "all tax planning work" do not satisfy the policy condition
• However, a properly identified set of matters (e.g. "the 30 specific schemes implemented for X clients between dates A and B") IS effective

Practical impact: notify with specificity. Generic notifications about whole categories of work are usually rejected at claim stage.

Squire v Allianz Insurance [2018] EWHC 2451 (Comm)

Considered notification of a regulatory investigation. The court held that a regulator's investigation could itself be a notifiable "circumstance" even if the investigation hadn't yet identified specific complainants. The investigation itself was the matter that might give rise to a claim.

Practical impact: a regulator's investigation, not just a third-party claim, can trigger notification. Architects facing ARB investigation, solicitors facing SRA investigation, accountants facing ICAEW review — each should consider whether the investigation is itself a notifiable circumstance.

McManus Seddon Runhams v Aviva [2016] EWHC 3527 (QB)

Solicitor failed to notify a client complaint that was later found to be a notifiable circumstance. The court found the policy on cover at the time of the original mistake (the underlying advice) was the correct policy — not the later policy when the formal claim arrived. Because the notification was late, the earlier policy responded; later policies did not.

Practical impact: late notification can mean a different policy year picks up the claim than the insured expected. With insurer changes between years, this is material.

Practical notification process

For UK PI policyholders:

1. If a client complains, notify the broker the same day
2. If a regulator opens an investigation, notify the broker the same day
3. If the firm becomes aware of a systemic methodological error, notify the broker within a reasonable time and identify the affected matters specifically
4. Don't blanket-notify — be specific about what is being notified
5. Don't sit on potentially-notifiable matters waiting for them to "go away"

The notification trigger and policy timing

The policy in force on the notification date is the policy that responds to any later claim arising from the notified circumstance. This is why timing matters:

• If the notification is made before renewal, the OLD policy year responds
• If the notification is made after renewal, the NEW policy year responds
• Where the firm changes insurer at renewal, this determines which insurer pays

Insurers often have an incentive to argue notification was effective in the OTHER year (the year they weren't on cover). Documentation of the notification date and the matters specifically notified is the policyholder's best protection.

About Apex Insurance Brokers

Apex Insurance Brokers Limited handles UK PI notification work for clients across regulated professions. FCA firm reference number 724952. Each notification we make is documented in writing, identifies the specific matters being notified, and references the relevant policy year. When a future claim arises, the notification record is the foundation of the cover position.