Reviewed by Matthew Bartlett, Director · Last reviewed 8 July 2026
Professional indemnity policies are annual contracts, but the practices they cover rarely stand still for a full year. A new partner joins, a new service line opens, an office moves to a different jurisdiction, fee income runs ahead of the estimate, an acquisition completes. Each of these can be a material variation that requires a mid-term adjustment to the policy. This entry sets out when adjustments are required, how premium is recalculated, and where the duty of fair presentation continues to run after inception.
A policy schedule sits on a set of assumptions the underwriter accepted at inception — the composition of the firm, the mix of work, the geographies served, the estimated fee income, the level of external oversight. If any of those assumptions changes materially during the policy period the policy needs to change with it. Common triggers include:
A change in legal entity — converting from partnership to LLP, incorporating a sole practice, forming a group. Adding a new profession or discipline that was not on the original submission. Opening or closing an office, particularly in a devolved jurisdiction where a different regulator applies. Onboarding a class of work the underwriter would have wanted to see (property development, financial services, cross-border, expert witness). A material change in fee income — usually up, but a large downward shift can matter too. Personnel changes at senior level where regulator approvals sit with named individuals. Any regulator investigation, complaint volume shift, or referral.
Most PI policies for regulated professions are rated on fee income, so an upward adjustment on income mid-term usually produces a pro-rata additional premium calculated from the date of the change to the policy expiry. Some markets rate primarily on headcount or fee-earner count and adjust on that basis. The formula and adjustment provisions are set out in the policy wording — look for the "premium adjustment", "declaration" or "adjustable premium" clause.
Where the change is qualitative rather than quantitative — a new practice area, a new office, a new activity — the insurer will usually re-underwrite that element of the risk rather than apply a formula. That can mean an additional premium, a change to the wording (an exclusion or endorsement), a change to the excess for the new activity, or in some cases a decision that the risk cannot be added and needs a separate placement.
Insurance Act 2015 s.3 imposes the duty of fair presentation on commercial insureds at inception and at any material variation of the contract. A mid-term change is a variation. The firm therefore has to make available — in a manner reasonably clear and accessible to a prudent insurer — every matter it knows or ought to know that is relevant to the change and to the risk generally.
This matters practically. If a firm asks its broker to add a new office and, in doing so, becomes aware of a matter that could give rise to a claim in the existing book, that matter is now within the fair-presentation obligation for the variation as well. Selective disclosure — telling the underwriter only about the change and not about the wider position — risks the remedies available to the insurer under Schedule 1 of the Act.
The submission pack for a mid-term change should include a covering note describing the change and the effective date, updated fee income figures and any revised fee-income projection for the balance of the year, updated headcount and named-individual list where relevant, evidence of any regulator approvals for the change (SRA authorisation for a new office, ARB registration for a new architect, RICS registration for a new surveyor, and so on), and a fresh check on notifications and circumstances.
Where the change is contentious — a new work type the underwriter may push back on, an acquisition of a firm with its own claims history, a move into a devolved jurisdiction — a full re-submission may be more efficient than a mid-term endorsement, particularly if the change is close to the renewal date.
Some policies contain a "declaration at inception" model where premium is provisional and reconciled at expiry against actual fee income. Others require notification of material change within a fixed period — often 30 days — from the effective date. Missing that period can, at worst, mean the change is not covered until notified and the policy responds only from the notification date. Read the notification clause carefully at inception and diarise it.
Apex Insurance Brokers is authorised and regulated by the Financial Conduct Authority (firm reference 724952). When a client tells us about a change — a new partner, a new office, a new service line, a shift in fee income — we assess whether it triggers a variation, prepare the endorsement submission, and manage the underwriter conversation. We place PI cover with Lloyd's syndicates and specialist company markets for solicitors, accountants, surveyors, architects, engineers, IT consultants, financial advisers and management consultants. A named broker handles the endorsement from first call through to the amended schedule. Ninety-five per cent of our clients renew with us the following year.
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