- PI is written on a claims-made basis — keep it continuous
- Client contracts typically drive the limit you need
- Watch the difference between aggregate and any-one-claim limits
- Buy run-off cover when winding down or selling the business
What PI actually covers
Defence costs and compensation if a client alleges negligence, error, omission or breach of professional duty. It does not cover intentional wrongdoing or contractual penalties you agreed to.
Claims-made basis
PI is written on a 'claims-made' basis: the policy that pays is the one in force when the claim is made, not when the work was done. Continuous cover matters.
Setting the limit
Client contracts usually specify a minimum limit — £1m, £2m or £5m. Aggregate limits apply across all claims in the year; any-one-claim limits reset per incident.
Run-off cover
When you close or sell the business, run-off cover keeps you protected against late claims for work already done. Six years is a common minimum.
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