Category: Insurance definitions · Reviewed by Amy Price, Account Executive · Last reviewed May 2026
A PI claims cooperation clause is a reinsurance contract provision under which the ceding insurer must keep the reinsurer informed about material claims and consult with the reinsurer before key strategic decisions, while retaining ultimate control of the claim itself. It is a middle ground between full claims control by the reinsurer and complete cedant autonomy.
The clause appears in reinsurance treaties and facultative slips, not in the underlying PI policy issued to the insured. It obliges the cedant to share information and consult on strategy in relation to claims that meet defined criteria — usually claims reserved above a threshold, claims with high reputational exposure or claims involving coverage issues. The cedant remains in legal control: it instructs solicitors, decides whether to settle and decides on what terms.
Cooperation clauses sit on a spectrum:
See PI claims control clause for the stricter mechanism.
For UK PI policyholders, the clause is largely invisible. But it shapes how the insurer behaves on claims that engage the reinsurance — particularly the speed with which decisions are made on settlement, and the latitude the insurer’s claims handler has to compromise.
Three elements typically drive the clause.
Trigger. The clause is activated when a claim crosses a threshold — for example, reserves exceeding 50% of the reinsurance attachment point, or any claim where coverage is in dispute, or any claim involving the insured’s senior management. Below the threshold, the cedant deals with the claim and reports in the ordinary bordereau.
Information rights. Once triggered, the cedant must send the reinsurer copies of pleadings, expert reports, settlement proposals and counsel’s advice. The reinsurer can ask questions, request additional information and attend conference calls.
Consultation duty. Before significant decisions — agreeing settlement above a threshold, paying defence costs above a budget, conceding liability — the cedant must consult the reinsurer and consider its views. The cedant is not obliged to follow the reinsurer’s view but must consider it in good faith.
The clause normally includes a sanction: failure to comply may result in the reinsurer declining to indemnify the cedant for the claim. The sanction is the lever that makes the clause meaningful, but in practice well-managed cedant-reinsurer relationships use the clause as a communication framework rather than a litigation trigger.
A large architects’ practice has a £20m PI tower. The £10m xs £10m layer is written by an insurer that has 60% facultatively reinsured to two reinsurers. The facultative slip contains a claims cooperation clause triggered when the cedant’s reserved indemnity exceeds £6m.
A multi-defendant claim arising from a residential development is intimated. Initial reserves are set at £3m on the architects’ policy. Two years into litigation, the reserves rise to £8m as the scope of damages and defence costs becomes clearer. The cooperation clause is now engaged.
The cedant sends the reinsurers the case papers, the most recent expert report and counsel’s advice on prospects. A joint conference is held. The cedant proposes mediation with an authority to settle up to £7.5m gross. The reinsurers prefer a tougher line. The cedant explains its reasoning — the litigation risk in the underlying jurisdiction, the multi-defendant dynamics, the policyholder’s commercial concerns — and the reinsurers ultimately agree, though noting their preference for a lower number.
The matter mediates at £6.8m. The cedant pays in full and recovers its 60% share from the reinsurers. The cooperation clause has done its job: the reinsurers were informed and consulted; the cedant retained control; the reinsurance contract is honoured.
If the cedant had agreed the settlement at £7.5m without consulting the reinsurers, the reinsurers could have raised the cooperation clause as a defence. They would not necessarily decline to indemnify in full, but they could open a dispute that delays recovery and damages the relationship.
Cooperation clauses matter in three contexts:
Large or complex claims. Where reserves approach the reinsurance attachment, the clause governs how the cedant and reinsurer interact through the life of the claim. Cooperation is the norm in well-functioning reinsurance relationships, and the clause crystallises the expectation.
Coverage disputes. When the cedant is contemplating denying or restricting cover, the clause requires consultation. Reinsurers care because a denial that turns out badly affects them; they may have a view on the wording analysis or the litigation risk.
Sensitive or reputational claims. Claims involving regulatory investigations, media attention, or strategically significant policyholders may engage the clause even where reserves are lower, depending on the trigger language.
For the policyholder, the impact is indirect but real. The pace of decisions by the cedant’s claims handler can slow when cooperation is engaged because additional steps — sharing papers, conferring with reinsurers — are required. A well-organised cedant manages this without disrupting the policyholder’s experience; a poorly-organised one can frustrate the insured.
Cooperation clauses are drafted in several common forms:
The label “claims cooperation” without the wording detail can mean any of these. The actual clause text needs to be read in each reinsurance.
What is a claims cooperation clause?
A reinsurance contract provision requiring the cedant to inform and consult the reinsurer on material claims, while leaving claims control with the cedant.
Does the cooperation clause appear in my PI policy?
No. It sits in the reinsurance contract between insurer and reinsurer. Your PI policy with the insurer is unaffected as a contract.
Does the clause delay my claim?
It can introduce additional steps for the insurer, particularly before settlement decisions. A well-managed cedant minimises any impact on the policyholder; in some cases the insured may notice longer decision cycles on large claims.
Who controls my claim if cooperation is engaged?
The insurer (your direct counterparty) retains control. The reinsurer is consulted but does not direct the claim. That is the key distinction from a claims control clause.
What happens if the cedant ignores the clause?
The reinsurer may raise it as a defence to indemnity for that claim. Outcomes range from full denial to partial indemnity, depending on the wording and the materiality of the breach.
Can the reinsurer veto a settlement?
Under a cooperation clause, no. Under a claims control clause, often yes. The two clauses must be read carefully because the labels overlap.
Does the FCA regulate cooperation clauses?
The FCA does not specifically regulate them, but the broader principles of fair claims handling under ICOBS and Consumer Duty apply to the insurer’s conduct toward the policyholder, regardless of internal reinsurance arrangements.
Is the clause common in PI?
Yes. Most PI treaties and many large facultative placements include some form of cooperation language. The stricter claims control clause is more common in specialist or distressed lines than in mainstream PI.
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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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