By Liz Smith, Claims Manager – Champion Insurance Group

At Champion Professional Risks, we see first-hand how easily a missed claim notification can put a professional firm at risk.

In this article, Liz Smith, our Claims Manager, shares practical insights on why early and accurate notification of claims and circumstances under a professional indemnity (PI) policy is so important – and the costly pit falls that firms often overlook.

Whether you’re a law firm, consultancy, accountancy practice or design and build construction contractor these are the risks you can’t afford to ignore.

When a client raises a concern, many professional service firms choose to handle it quietly – hoping to avoid escalating the issue. But when it comes to professional indemnity insurance, a wait-and-see approach can seriously undermine your cover.

Most professional indemnity insurance policies in the UK are claims-made, which means they cover claims or potential claims notified during the policy period – not the year the work was carried out.

What you need to notify under professional indemnity insurance

Your policy likely requires notification of both:

• Claims – A formal allegation of negligence or a written demand for compensation.
• Circumstances – Any situation that might lead to a claim (even if no client has complained yet).

These could include:

• A client expressing dissatisfaction or hinting at legal action
• You spotting a mistake or omission
• Disputes over advice or project outcomes
• Regulatory investigations or audit issues

Why firms delay – and why it’s risky

Many firms hesitate to notify circumstances because:

• “It probably won’t turn into anything serious”
• “We’ll sort it out internally – it’s under our excess”
• “We don’t want to affect next year’s premium”
• “There’s no formal complaint yet”
• “We’ll include it at renewal”

But here’s the problem: delayed or missed notifications can invalidate your professional indemnity cover. If the matter escalates after the policy period – and wasn’t notified – you could be left without protection.

The pitfalls of not notifying circumstances to your professional indemnity insurers

Delaying or failing to notify a circumstance might seem harmless in the moment – especially if the issue appears minor or unlikely to escalate. But with professional indemnity insurance, that hesitation can come at a high cost. Policies are strict about notification obligations, and missing the window to report a potential problem can lead to serious consequences. Below are some of the most common and most damaging risks firms face when they don’t notify in time.

❌ Claim denied due to late notification
❌ Loss of legal defence costs
❌ Breached policy terms—which may impact future insurability
❌ No cover under new insurer (they’ll likely exclude known issues)

Best practice: how to stay protected

✅ Err on the side of caution – If it might lead to a claim, notify it
✅ Notify immediately – Don’t wait until renewal
✅ Use your broker – They’ll guide you and manage insurer communication
✅ Document clearly – Keep a record of when you became aware
✅ Avoid admitting liability or settling without insurer consent

How we can help

Champion Professional Risks are specialists in Financial Lines insurance which includes professional indemnity. We arrange competitive cover from a large panel of financial lines insurers and advise firms daily on how to handle Professional Indemnity notifications confidently and compliantly.

In respect of claims support, we assist our clients:

• Assess whether something is notifiable
• Draft clear and accurate notifications
• Minimise premium impact at renewal
• Avoid common missteps that could leave you exposed

At Champion Professional Risks, we specialise exclusively in financial lines and professional indemnity insurance. Our deep sector knowledge, broker expertise and hands-on claims support mean our clients always receive clear, proactive guidance. Whether you’re navigating a complex claim, unsure whether to notify a circumstance, or simply want peace of mind that your cover is working as it should, we’re here to help.

Get in touch with our team today for expert advice tailored to your business and the confidence that you’re protected, properly.

📞03330 430 430 (option 1) 
📧 Profin@ChampionInsure.co.uk