Category: Insurance definitions · Reviewed by Chrissie Anderson, Client Executive · Last reviewed May 2026
A tort claim arises from a duty imposed by law — typically a duty of care in negligence — while a contract claim arises from a duty agreed between the parties under their contract. UK professional indemnity wordings cover both in different ways: narrower “negligence-only” wordings respond only to tort claims, while broader “civil liability” wordings respond to any civil legal liability, including contract claims.
In English law, a professional can owe duties to a client in two distinct ways. The first is a duty in tort — usually the duty to take reasonable care, recognised by the common law of negligence — that arises whether or not there is a contract. The second is a duty in contract — created by the terms the parties have agreed, which may be more onerous than the common-law duty. A solicitor advising under a retainer, an architect under an appointment, an accountant under an engagement letter, will typically owe duties in both tort and contract simultaneously, often arising from the same conduct.
The two routes can lead to different outcomes:
PI wordings respond differently to each. The cover trigger turns on how the policy is worded.
UK PI policies fall broadly into three groups based on their insuring clause:
Negligence-only wordings. The insurer agrees to indemnify the insured against claims arising from negligent acts, errors or omissions in the conduct of the professional business. By the wording, these policies respond only where negligence is alleged or proven. A pure contract claim — where the firm is sued for failing to deliver a promised outcome but no negligence is alleged — may fall outside cover. Negligence-only wordings are now uncommon in the UK PI market for regulated professions, but still appear in some package products and overseas-influenced wordings.
Civil liability wordings. The insurer agrees to indemnify against civil liability arising from the conduct of the professional business. This is broader — it picks up tort, contract, statutory duty, equity, restitution and any other civil claim — subject to the policy’s exclusions. Most regulated UK professions’ PI is written on a civil liability basis. The SRA’s minimum terms for solicitors’ PI require civil liability cover; ARB’s expected criteria for architects’ PI follow the same approach. See civil liability extension PI.
Civil liability with contract carve-back. Some wordings start with a civil liability insuring clause but exclude or limit contract liability that goes beyond the common-law duty of care. The exclusion is often labelled “voluntary assumption of liability” or “liability assumed under contract that would not otherwise have applied”. This is the most common practical limitation — the policy covers contract liability, but only to the extent that the same liability would have arisen in tort. See voluntary assumption of liability PI.
The distinction matters most when a firm signs onerous contract terms — fitness-for-purpose warranties, uncapped liability, indemnities, performance guarantees — that go beyond what tort law would impose.
A small architectural practice in Bristol with £600,000 fee income is appointed on a residential scheme. The client appointment includes two relevant clauses:
A year after completion, the building proves unsuitable for the client’s commercial use. The client sues for £400,000 to remedy the design. There is an argument the design was reasonable for residential use but unsuitable for commercial — i.e. the architect was not negligent, but breached the fitness-for-purpose warranty.
Under a negligence-only PI wording: the claim is outside cover because no negligent act, error or omission is alleged. The firm pays the £400,000 from its own resources, subject to any defence the insurer may agree to fund under a defence-costs extension.
Under a civil liability wording with no contract carve-back: the claim is covered. The insurer pays the £400,000 settlement subject to the policy excess.
Under a civil liability wording with voluntary assumption carve-back: the claim is partially covered. The insurer pays the part of the loss that would have arisen from a negligent breach of the common-law duty. The portion that arises only from the fitness-for-purpose warranty — i.e. liability assumed by contract beyond what tort would impose — is excluded. Quantum allocation is often difficult and contested.
The figures are illustrative. The structural point is that the policy wording, not the headline limit, determines whether contract-based liability is recoverable.
Design professionals signing collateral warranties. Architects, engineers and design-and-build contractors are routinely asked to sign collateral warranties to funders, tenants and purchasers. These warranties often contain fitness-for-purpose obligations or onerous performance standards. A civil liability wording with no carve-back is the safer position. See breach of contract cover PI.
Consultants on outcome-based contracts. Management consultants, marketing agencies and IT consultancies increasingly work on contracts that promise results — a campaign delivering a set ROI, a system delivering a set throughput. If the result is not delivered, the claim is contractual. Negligence-only PI wordings can leave these claims uninsured.
Firms with US or international contracts. Contracts drafted under US influence often contain indemnity language and warranties that go well beyond the English common-law duty of care. The interaction between such terms and a UK PI wording’s contract carve-back can produce unexpected gaps.
UK PI wordings phrase the tort-vs-contract question in several ways. Look for:
The exclusions section and the definitions section are where the practical scope is determined. The headline insuring clause is only the starting point.
Is a contract claim always covered by PI insurance?
Not automatically. It depends on the insuring clause and the exclusions. Civil liability wordings respond to contract claims subject to any voluntary assumption exclusion. Negligence-only wordings may not respond to a contract claim that does not also amount to negligence. The schedule and wording control.
What is the difference between civil liability and negligence-only PI?
Civil liability wording responds to any civil legal liability — tort, contract, statutory, equitable, restitutionary. Negligence-only wording responds only where the insured’s liability is for a negligent act, error or omission. Civil liability is broader and is the regulatory standard for solicitors and architects.
Does the SRA require civil liability PI?
Yes. The SRA’s minimum terms and conditions for solicitors’ PI require cover for civil liability arising from the practice. ARB’s expected criteria for architects similarly require civil liability cover at primary level. Many other UK professions’ regulators follow the same approach. See MTC minimum terms.
What does “voluntary assumption of liability” mean?
It is a common exclusion that removes cover for liability the insured has accepted under contract that goes beyond the common-law duty of care — for example, fitness-for-purpose warranties or indemnities not based on negligence. The aim is to prevent insureds expanding the insurer’s exposure by signing onerous contract terms. See voluntary assumption of liability PI.
Are fitness-for-purpose warranties insurable?
Sometimes — by specific extension, with additional premium, and with insurer consent. Many UK PI insurers will not cover fitness-for-purpose obligations as a matter of underwriting policy. Where cover is available, it is usually sub-limited and subject to careful wording.
If a client claims both negligence and breach of contract, what happens?
The PI insurer will usually treat the matter as a single claim and respond to the part within cover. Where the same loss flows from overlapping breaches (negligence and contract giving rise to the same damages), the insurer typically indemnifies in full subject to any voluntary assumption carve-back affecting the contract limb.
Does signing an indemnity in favour of a client void my PI cover?
It does not void the policy, but it can trigger exclusions. Indemnities that go beyond what tort would impose are typically caught by the voluntary assumption exclusion. The insurer pays for liability that would have existed without the indemnity; liability arising only from the indemnity itself may be excluded.
Can I negotiate my contract to keep liability inside what PI covers?
Often yes. Aligning the contract’s standard of care to “reasonable skill and care commensurate with the profession”, avoiding fitness-for-purpose warranties, and limiting indemnities to negligent acts are practical steps. A broker and a legal adviser working together can normally identify the gaps before the contract is signed.
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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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