Professional indemnity insurance is a technical purchase. Two policies with the same headline limit can behave very differently when a claim lands. The broker sitting between you and the insurer is the person best placed to explain those differences, and under the FCA rules that govern insurance distribution the broker is obliged to act honestly, fairly and professionally in your best interests (ICOBS 2.5) and to give information that is clear, fair and not misleading. The Consumer Duty (PRIN 2A) reinforces the same expectation for retail clients. Below are ten questions worth asking before you sign a renewal or accept a new placement. Each carries a short note on why it matters and what to do if the answer is thin.
An aggregate limit is the ceiling for all claims in the policy year combined. An each-and-every basis restores the full limit for each separate claim. For firms exposed to correlated risks — a systemic advice error, a cyber incident affecting many clients — the difference can be the difference between full cover and a shortfall. Ask which basis applies, whether defence costs sit inside or outside the limit, and how the insurer treats a series of related matters.
The excess may apply per claim, per claimant, or in the aggregate. It may bite on defence costs as well as damages. It may be higher for particular activities — conveyancing, tax advice, certain types of financial planning. A retention that looks modest on the schedule can become a serious cashflow issue if several matters run in parallel. Ask for a worked example and confirm in writing which activities attract a higher excess.
PI is written on a claims-made basis, so claims notified after the policy expires are not covered unless run-off is in place. For most professions run-off of at least six years is the norm; some regulators require it explicitly. Ask what the run-off premium is likely to be, whether it can be paid in instalments, and whether the current insurer offers a fixed multi-year run-off product. The answer matters years before you plan to retire.
Some policies include one automatic reinstatement of the limit for an additional premium; others do not. Where reinstatement is available, ask about the trigger, any inner limits that survive, and whether reinstatement applies to defence costs. Firms with heavy transactional exposure — solicitors, accountants, corporate finance advisers — should treat this as a core question rather than a footnote.
Territorial limit is where the work was done; jurisdictional limit is where a claim can be brought. A firm with UK-only clients may still face a claim in a foreign court if a project touched overseas assets. Ask whether the policy responds to claims brought in the United States or Canada and whether any activity is excluded when performed outside the UK. The broker's duty to explain policy terms extends to territorial questions.
Cyber, sanctions, communicable disease and cryptoasset exclusions have moved through the market in recent years. Ask for a clean list of exclusions on the quoted wording, and ask specifically what has changed since last renewal. Get the answer in writing. Aneco v Johnson & Higgins [2001] UKHL 51 remains the leading authority on a broker's duty to place cover that responds to the risks the client is known to run, and an unexplained new exclusion is the kind of detail that duty is designed to catch.
Under ICOBS 4.4 an insurance broker must, on request from a commercial customer, disclose the commission received. Many brokers disclose commission proactively; some charge a fee in addition. Ask for the total remuneration, the split between commission and any fee, and whether the broker receives any profit share, override or contingent payment from the insurer. A broker who declines to answer, or gives a vague answer, is not meeting the FCA's disclosure expectations.
When a matter arises the broker's role shifts from placement to advocacy. Ask who handles the notification, how quickly the insurer typically appoints panel solicitors, whether the firm has a choice of solicitor, and how coverage disputes are escalated. A broker who cannot describe the process in concrete terms is one to reconsider. See the broker's duty of care to the client for the wider framework.
A policy is only as good as the balance sheet standing behind it. Ask for the insurer's A.M. Best or Standard & Poor's rating, whether the insurer is UK-authorised or writes on a passported basis, and whether the risk is being placed with a syndicate at Lloyd's, a UK company, or a foreign carrier. For long-tail lines such as PI, financial strength is not a technicality.
Ask when the broker will begin marketing the renewal, when quotes are expected, and what the fall-back is if terms arrive late. A rushed renewal is a poor renewal. If the broker cannot commit to a timeline, escalate — silence at 21 days out is a warning sign.
Ask for the answer in writing. If it does not arrive, escalate to the compliance contact at the broker. If that fails, the firm may complain under DISP and, if eligible, refer the matter to the Financial Ombudsman Service. A broker who will not answer these questions is not the right broker for a regulated professional practice.
For profession-specific detail see the pillars for solicitors, accountants, architects and independent financial advisers.
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.