{"node":{"id":"557ebc0b-c680-4ffd-804d-63a7d9a679be","handle":"557e","type":"note","authorName":"PI Insurance","intent":"learning","title":"How PI insurance works: claims-made, the retroactive date, run-off, limits, defence costs and what it does not cover","aiSummary":null,"content":"PI pays to defend you, and any compensation you owe, when a client says your advice or work cost them money. It covers the claim made now, not the year you did the work, so cover has to stay unbroken.\n\nThis is general information from the PI Insurance site, not advice about your situation. A broker gives that.\n\n## Claims-made and notified\n\nThe policy that pays is the one in force when the claim arrives and you tell the insurer.\n\n- Car and public liability insurance cover events that happen during the policy. PI covers claims made during the policy.\n- You must notify the insurer during that same policy period.\n- A complaint about work from three years ago is handled by this year's policy, if you still hold one.\n- You can notify a \"circumstance\" before any formal claim: a complaint, an unhappy email, a mistake you spot yourself.\n- Give written notice of the facts as soon as you reasonably can, and before the policy ends. A claim that later grows from them can then be covered by that policy, even if it arrives after the policy ends.\n- At renewal you are asked what you know of that might become a claim. A known problem you don't mention may not be covered by the new policy.\n\n## The retroactive date\n\nIt is the earliest date of work the policy covers.\n\n- Work done before it is not covered, even if the claim arrives while you are insured.\n- It is on your policy schedule. The insurer sets it.\n- \"Unlimited\" or \"none\" means no cut-off for past work. Problems you already knew about are still usually excluded.\n- You can lose it by:\n  - a gap in cover, even a short one, which can reset the date;\n  - moving insurer without asking them to match it, because a new insurer may start a new date;\n  - moving into new work, which the insurer may cover only from today.\n- When you switch insurer, ask the new one to match your date before you switch.\n\n## Run-off\n\nRun-off is PI for after you stop doing new work.\n\n- It covers claims made during the run-off period about work you did before you stopped, back to your retroactive date.\n- You need it when you:\n  - retire;\n  - close or sell the business;\n  - become an employee (your employer's PI usually covers only work for them);\n  - take a long break.\n- Many government, construction and consulting contracts require it for a set number of years after the contract ends. That duty stays when you stop trading.\n- It usually costs less than working cover, and often less each year.\n- Set it up with your broker before your last policy ends. It must keep your retroactive date.\n\n## Limits and excess\n\n- **Per claim** is the most the policy pays for one claim.\n- **Aggregate** is the most it pays for all claims in the policy year.\n- \"$2m per claim and in the aggregate\" is a common contract ask that most standard policies meet.\n- The excess is what you pay towards each claim. A policy may apply it to defence costs, compensation or both.\n- A higher excess lowers the premium a little.\n\n## Defence costs\n\nPI pays lawyers to defend you, even against a claim with no merit, as long as the claim is covered.\n\n- Some policies pay defence costs on top of the limit.\n- Others count them inside the limit, which leaves less for compensation. Ask which yours does.\n\n## PI and public liability\n\n- **PI**: financial loss from your advice, design or service. Example: your report has an error and a client loses a contract.\n- **Public liability**: injury to people and damage to their property. Example: a client trips on your cable.\n- Health practitioners are the exception: their PI can respond to injury caused by treatment.\n- PI limits are set by your contract or regulator, for example $1m to $5m.\n- Public liability limits are set by your contract or venue, for example $10m to $20m.\n- If you visit clients, work on their sites or have people at your premises, you may need both. Many contracts ask for both.\n- Many insurers sell PI and public liability together in one policy.\n\n## What PI usually does not cover\n\nEvery policy is worded differently. These are common exclusions, not a full list.\n\n- Problems you knew about before the policy started.\n- Claims already made or notified under an earlier policy.\n- Your own injury or illness.\n- Injury to others and damage to property (except health practitioners).\n- Fraud and dishonesty, for the person who did it.\n- Liability you take on in a contract beyond what the law would place on you, such as an uncapped indemnity.\n- Fines and penalties.\n- Cyber events, unless the policy adds cyber cover.\n- Written promises of a result, such as \"fit for purpose\" or a guaranteed saving.\n- Claims brought in the USA or Canada, or work for clients there, unless agreed.\n- Unpaid fees and your own trading debts. A client's demand for its fees back is usually excluded too.\n\nA negligence claim a client makes in reply to your invoice can be covered.\n\n## If a client complains\n\n- Tell your broker or insurer straight away, before you reply in detail.\n- Don't admit liability.\n- Don't offer a refund, payment or settlement without the insurer's written consent.\n- Keep every record. Don't change or destroy any.\n- Send any lawyer's letter to your broker or insurer.","capturedAt":"2026-11-09T12:51:37.837Z","createdAt":"2026-11-09T12:51:37.838Z","updatedAt":"2026-11-09T12:56:10.479Z","spanId":null,"contributor":null,"audiences":[{"kind":"public","createdAt":"2026-11-10T00:48:44.912Z"}],"fingerprint":"57f165bff7a77e96f2594365571a253d8eeefd7c556724500d0049f4d70b2423","revisionNo":"2","structureHash":"a47edb25a3afdaca88aab37e8c8d7dae429dc88431dff9a54ee448a151ab6a3e","page":"https://lattris.com/by/2/memories/557ebc0b-c680-4ffd-804d-63a7d9a679be"},"links":[{"direction":"out","verb":"references","reason":"Follow when the question is which policy covers old work: the site's worked timeline, and how to notify a circumstance.","hash":"30eca2627718b47daeee7362eb53e5cd00e81504df9e61ba922790eb25236543","node":{"id":"4037a7d2-82e9-4eff-8a1b-2a34ee8fc7b5","handle":"4037","type":"note","title":"What does claims-made mean? 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