Category: Insurance definitions · Reviewed by Matt Bartlett, Director · Founder · Last reviewed May 2026
A PI tower program is a stack of insurance layers that together provide a single high limit of indemnity. A primary policy sits at the base, with one or more excess layers above attaching at the top of the layer beneath. Towers are used when one insurer cannot or will not write the full limit a firm needs — most often above £5m for medium firms or above £10m–£20m for larger UK professional practices.
The phrase “tower” is a visual shorthand. Each layer in the tower is a separate insurance contract, written on its own paper, by its own insurer, with its own attachment point (the loss level at which the layer starts to respond) and its own limit (how far up the layer extends). When the loss reaches the top of one layer, the next layer attaches; when that one is exhausted, the next attaches above; and so on, until either the loss is fully paid or the top of the tower is reached.
A simple worked structure for a UK consultancy buying £25m of PI cover might be:
Each layer is an independent contract. Each layer has its own wording, its own premium, its own renewal date (typically aligned to the primary), and its own claims notification requirements. Coordination between the layers is achieved through “follow-form” provisions in the excess layers and through a claims agreement that binds the layers to the primary insurer’s settlement decisions within defined thresholds.
Tower programs are particularly common in construction-adjacent professions where contract requirements drive high limits — large architectural practices, multi-disciplinary engineering firms, large property surveyors, large solicitors’ practices acting on big-ticket transactions, and large management consultancies with global mandates.
Building a tower involves four design decisions:
1. Total limit (the height of the tower). Driven by client contract requirements, regulatory minimums, and the firm’s risk appetite. A UK Tier 2 architects’ practice might need £10m to meet PSC framework requirements; a global engineering firm working on a £500m infrastructure scheme might need £100m or more.
2. Layer sizes. Larger layers reduce the number of insurers involved but concentrate exposure. Smaller layers spread exposure across more markets but raise transaction cost. £5m and £10m layers are common UK market sizes; £25m layers appear in larger international placements.
3. Layer wordings. The primary establishes the policy scope. Excess layers typically follow the primary’s form (“follow form”) but may carve out specific extensions or add their own restrictions. Following form is not absolute — divergences are common and need to be tracked.
4. Attachment-point alignment. The top of one layer must align with the attachment point of the next without gap or overlap. Misalignment leaves an uninsured slice or creates ambiguity over which insurer pays.
When a claim is notified, it goes first to the primary insurer. As the loss develops, if reserves approach the primary limit, the broker notifies the first excess layer. Excess insurers’ rights to information, to associate in defence, and to participate in settlement are governed by the excess wording. By the time a claim is heading into the upper layers, the firm’s broker is typically running monthly status updates to every insurer in the stack.
Consider a UK structural engineering firm with a £30m tower:
A large infrastructure project goes wrong and a claim settles at £22.5m plus £2.5m of defence costs (£25m total). The tower responds as follows:
If the firm has only £20m of tower and the loss reaches £25m, the firm bears the £5m shortfall personally. If defence costs sit inside the limit on any layer, that layer’s contribution to indemnity is reduced accordingly. Some layers in a tower include defence costs inside the limit; others sit outside. The schedule for each layer must be read.
Three situations require tower thinking:
Contract-driven high limits. Public-sector frameworks, large commercial clients, JCT and NEC construction contracts, and major-project client agreements increasingly require PI limits well above what a single insurer will write on one contract. A tower is the only way to get there.
Single-market capacity caps. Even when a single insurer is willing, the rate offered above a certain layer is often poor value. Tower placement lets the broker shop different layers to specialist excess markets and improve overall pricing.
Sector-specific high-exposure risks. Large multi-disciplinary firms, design-and-build consultancies, and firms working on critical infrastructure have catastrophic-loss scenarios that justify £25m–£100m towers. The tower structure also provides resilience: a layer-by-layer renewal allows the firm to replace a single layer’s insurer without disturbing the rest of the tower.
The firm should always know — and the broker should always document — the total tower limit, the layer breakdown, the attachment points, the insurer for each layer, the deductible position, and whether defence costs sit inside or outside each layer.
Towers can be structured in different ways:
The wording on each layer’s schedule governs. Brokers should circulate a “tower comparison” document at renewal showing where wordings diverge.
What is a PI tower program in plain English?
It is a stack of insurance layers that together provide a higher overall limit than any single insurer is prepared to write on its own paper. Each layer is its own contract; each layer attaches at the top of the layer below; together they deliver one combined limit.
Why use a tower instead of one big policy?
Because single insurers in the UK and London market have capacity caps for any one risk. Above those caps, only a multi-insurer tower can deliver the limit needed. Towers also spread risk across insurers, improve overall pricing through layer-by-layer market competition, and provide structural resilience at renewal.
What is the attachment point in a PI tower?
The attachment point is the loss level at which a layer starts to pay. A “£5m excess £5m” layer attaches at £5m and pays up to £10m of loss. Attachment points must align so there is no gap and no overlap between layers in the tower.
Does each layer have its own deductible?
Usually only the primary layer carries a self-insured retention or deductible at the bottom of the tower. Excess layers attach at the top of the layer below and do not impose a fresh deductible. Bespoke programs may, however, include further self-insured retentions at higher attachment points, particularly for very large firms.
What happens if an insurer in the tower fails or refuses to pay?
A layer that fails to respond — through insolvency, denial of cover, or dispute — can create a gap in the tower. Drop-down provisions in some excess layers allow the next layer up to attach at a lower point in that scenario. Without drop-down, the firm bears the gap. FSCS may pick up part of an insolvent UK insurer’s exposure subject to its rules — see FSCS PI cover explained.
Are excess layers always follow-form?
Most are, but follow-form is rarely absolute. Excess wordings typically follow the primary “save as otherwise provided in this policy” — leaving room for the excess to carve out specific cover. Brokers should provide a tower comparison document showing follow-form divergences so the firm knows exactly what each layer does and does not pick up.
Can a tower include layers from different jurisdictions?
Yes. UK firms with international exposure often place the primary in the UK or London market and excess layers in London, Bermuda, or other major markets. Jurisdictional differences in wording and dispute resolution mean coordination is more complex on internationally placed towers; the broker should track applicable law for each layer.
How does claims notification work for a tower?
A claim is notified first to the primary insurer. The broker simultaneously notifies excess layers of the existence of the claim. As reserves develop, formal layered notifications and meaningful information flow follow the route described in the claims agreement and the excess wordings. Late notification to an excess layer is a recurring source of dispute and should be avoided through routine notification of all layers from the start.
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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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