A professional indemnity renewal in a year the firm has a live claim or a notified circumstance differs materially from a clean one. Disclosure sharpens, the underwriting narrative changes, and market appetite narrows. This entry sets out what to expect and how Apex Insurance Brokers approaches the process.
A renewal is a new contract of insurance. Under the Insurance Act 2015, s.3, a commercial insured must make a fair presentation of the risk — disclosing every material circumstance the insured knows or ought to know (s.4), in a manner reasonably clear and accessible to a prudent underwriter. A live claim or notified circumstance is plainly material. Failure to disclose engages the remedies in s.8 (avoidance, proportionate reduction, or contract variation) depending on whether the breach was deliberate, reckless, or neither. The duty is not discharged by the incumbent already knowing.
Underwriters rebuild the price around three inputs. First, loss ratio — premium paid over the last five to ten years against claims and reserves; a single reserved matter can push a ratio above 100% in a light-premium year. Second, quantum of the notified matter — an insurer with a £180,000 reserve treats the file very differently from one at £15,000. Third, root cause — a one-off oversight is priced differently from a systemic file-handling issue that could sit behind further notifications.
Expect one or more of: premium uplift, increased retention, reduction in aggregate or per-claim limit, or a specific exclusion of further claims arising from the same client, matter or transaction.
Most PI proposal forms ask whether any partner, director or member is aware of any circumstance that might give rise to a claim. The question is directed at the signatory and their fellow principals — not at the insurer's own file. Even where a matter has been notified, the firm still has to answer specifically and describe the circumstance in the narrative the form invites. Under Insurance Act 2015, s.7, the knowledge of senior management and those responsible for the insurance is imputed to the insured. A nil answer, on the assumption the insurer has been told, is a disclosure failure.
If the incumbent declines to renew, alternative markets face the notified matter as a pre-existing circumstance. Most will exclude it — often as "any claim arising from any matter notified to a previous insurer" — because they will not knowingly write a known loss. New cover for future work is achievable, but the firm remains reliant on the incumbent (or its run-off provisions) for the notified matter. Broker legwork focuses on drawing the exclusion as narrowly as possible.
Solicitor firms benefit from the continuous-cover requirement in the SRA Minimum Terms and Conditions. Where a firm has been continuously insured, a qualifying insurer that has issued a policy and been notified of a circumstance cannot simply refuse to renew — it remains on risk on prescribed terms until replacement cover is in place or the firm enters the assigned-risks route. That protection does not exist for architects, accountants or IFAs in the same form. Architects work to ARB Code Standard 8, ICAEW firms to the ICAEW PII Regulations 2020 — both require adequate cover but neither compels the incumbent to continue.
Solicitors also have the ARP as a last-resort backstop, run under the SRA Indemnity Insurance Rules 2020. A firm unable to obtain open-market cover can enter the ARP for a limited period on prescribed terms, at an intentionally uncompetitive premium. It exists so that clients remain protected while a firm resolves its position — not as a routine solution.
The single most useful thing a firm can do is prepare a structured, honest narrative — chronology, cause, remedial action, and any recovery. Underwriters read hundreds; the defensive ones attract the harshest terms.
A four-partner solicitors firm has a claim reserved at £180,000 from Q1 2024. Renewal falls due Q4 2024 with the incumbent. Incumbent's terms return with premium up 42%, retention increased from £25,000 to £50,000, aggregate limit unchanged, and a specific exclusion for further claims arising from the same client relationship. Apex approaches two alternative insurers; both quote with the exclusion drawn slightly wider — extending to the same transaction and any related transactions — and one adds a 20% surcharge. The firm accepts the incumbent's terms because the exclusion is the narrowest of the three offers. Every renewal turns on its own facts.
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.