Category: Insurance definitions · Reviewed by Jake Leat, Associate Director · Last reviewed May 2026
A PI claims control clause is a reinsurance provision that gives the reinsurer the right to control the investigation, defence and settlement of claims that meet defined criteria, rather than merely to be informed and consulted. Where a cooperation clause shares information, a control clause shifts decision-making.
The clause is a reinsurance contract term. It empowers the reinsurer to take over, or jointly control, the conduct of qualifying claims. Typical features include the right to appoint or approve solicitors, the right to direct settlement strategy, the right to require or refuse settlement offers, and the right to attend mediations or trials.
The clause exists because reinsurers writing large lines on PI risks want to be able to influence outcomes on the claims that hit their layers. A cedant’s strategic preference may differ from the reinsurer’s; control clauses ensure the reinsurer’s view prevails when it matters most.
In UK PI, full claims control clauses are less common than cooperation clauses but appear in specialist or hard-market contexts and in facultative placements on very large risks. The clause does not appear in the underlying PI policy — it lives between insurer and reinsurer — but its operation can be felt by the policyholder through slower decisions and tougher settlement positions on large claims.
Four operational elements characterise a control clause.
Trigger. Like the cooperation clause, the control clause has a trigger — usually a reserve threshold, a claim type, or a categorical event (regulatory investigation, declaratory action on coverage). Once triggered, the reinsurer has the rights set out in the clause.
Appointment and instruction of advisers. The reinsurer can typically nominate or approve panel solicitors, counsel, experts and loss adjusters. Existing instructions may continue under the reinsurer’s direction, or the reinsurer may insist on changes.
Decision authority. The reinsurer decides on settlement, on pleadings strategy, on disclosure approach, and on payments out of the indemnity reserve. The cedant remains the contracting party to the policyholder and must execute decisions formally, but the substance is the reinsurer’s.
Consequences of non-compliance. Failure by the cedant to honour the clause typically results in the reinsurer being able to decline indemnity for the claim or to settle on its own preferred terms regardless of what the cedant did.
The clause poses a coordination challenge for the insurer. Its claims handler is contractually bound to take instructions from the reinsurer but is also bound by ICOBS and Consumer Duty obligations to handle the policyholder’s claim fairly and promptly. Tensions are resolved through internal protocols and, where the wording allows, by separating routine claim handling from the strategic decisions reinsurers actually want to control.
A surveyors’ practice has a £30m PI tower for high-rise valuation work. The £20m xs £10m layer is reinsured 80% facultatively, with a claims control clause triggered for any claim where reserves exceed £5m or where misrepresentation/fraud is alleged.
A negligent valuation claim is intimated for £18m. Initial reserves rise above £5m within six months. The claims control clause is engaged.
The lead reinsurer appoints a specialist defence solicitor and convenes a strategy meeting with the cedant. The reinsurer’s preferred approach is robust defence with limited early settlement engagement; the cedant’s claims handler would have preferred to mediate sooner. The reinsurer’s view prevails under the clause.
Two years later, after expert reports and a contested hearing, the matter mediates and settles at £13.5m. The cedant pays the policyholder in full and recovers its reinsured share. The clause has determined the path of the claim — not the outcome to the insured, who is paid as the policy provides — but the cedant’s claims experience and reserves trajectory.
The policyholder’s day-to-day experience is filtered through the cedant’s claims handler. Practical effects include longer decision cycles on settlement offers, an external defence solicitor selected by the reinsurer rather than the cedant’s normal panel, and a perceptible firmness in settlement positioning on layer-engaging claims.
Claims control clauses concentrate authority where the financial stakes are highest. They matter in three contexts.
Large layer-engaging claims. When a claim is likely to exceed an excess layer’s attachment point, the reinsurer above that layer has direct skin in the game and uses control to manage outcome.
Specialist or distressed lines. PI lines in hard markets, or specialist sub-classes (large-scheme financial advice, building safety, certain medical malpractice analogues), often carry control clauses to give reinsurers confidence to write capacity at all.
Cross-border claims. Where a UK PI policy responds to a claim in another jurisdiction with different liability dynamics, reinsurers may insist on control to manage litigation risk overseas.
The clause appears in several drafting styles:
A “claims control” label without close reading of the wording can mislead because the spectrum from cooperation to control is broad.
What is a claims control clause?
A reinsurance provision giving the reinsurer the right to control investigation, defence and settlement of qualifying claims, rather than only to be informed.
How does it differ from a cooperation clause?
Cooperation requires consultation; control assigns decision-making. Cooperation keeps the cedant in charge; control hands the reinsurer effective authority.
Will the reinsurer talk to me directly?
Usually no. The reinsurer instructs the cedant’s claims handler. You remain in contract with the insurer. The reinsurer’s influence is felt through the cedant’s decisions.
Can my insurer refuse my settlement preference because of the clause?
The insurer remains your counterparty. Your policy entitles you to indemnity subject to its terms. The insurer can decline a particular settlement offer for strategic reasons that may be driven by the reinsurer, but it cannot avoid its obligation to indemnify if cover is otherwise engaged.
Why would an insurer agree to a claims control clause?
To secure reinsurance capacity at acceptable terms. Reinsurers may insist on control before writing certain risks or layers, especially in hard markets or specialist lines.
Does the clause affect speed of claims handling?
It can. Where reinsurer approval is required for steps the cedant would otherwise take immediately, decisions can be slower. Well-organised cedants and reinsurers minimise this through protocols.
Is the control clause enforceable if I’m not a party?
The clause is enforceable between insurer and reinsurer. As policyholder you are not a party. But your insurer’s conduct toward you remains governed by ICOBS, Consumer Duty (where applicable) and your policy.
Does the clause survive if my insurer becomes insolvent?
The clause itself depends on the reinsurance contract. Insolvency triggers FSCS protection or, in some cases, a cut-through arrangement letting you claim directly against the reinsurer. See PI cut-through clause.
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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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