Tell your broker or insurer straight away, before you reply in detail. Do not admit liability, and do not offer or pay money or agree a settlement without the insurer's consent, because that can affect your cover. Keep every record, and pass any letter from the client's lawyer to your insurer.
Source: https://piinsurance.com.au/what-to-do-if-a-client-complains/, fetched from the preview https://pi-react-4ee768.pages.dev/what-to-do-if-a-client-complains/ on 10 Nov 2026; site dated 3 Nov 2026. Preview wording, not yet broker-reviewed. General information, not advice.
Key points
- Tell your broker or insurer straight away, before you reply in detail.
- Do not admit liability, or offer money, without the insurer's consent.
- Keep every record and pass any lawyer's letter to your insurer.
Step by step
- Tell your broker or insurer straight away. Most policies make prompt notification a condition. A delay can reduce what the insurer pays if it causes them a loss.
- Do not admit liability. It is fine to be polite and say you are looking into it. Avoid saying "it was my fault" in writing or on the phone.
- Do not offer or make payments, refunds or a settlement without the insurer's written consent. A deal you make yourself can prejudice the insurer's position, and they may not have to cover it.
- Keep records. Save emails, drawings, file notes, versions and invoices. Write a short note of what happened while you remember it.
- Do not destroy or change documents. Even untidy notes. Altering records can make a defensible claim hard to defend.
- Refer the client's lawyer to your insurer. If a lawyer writes to you, send the letter to your broker or insurer and let them respond.
Notify circumstances before a formal claim
You do not need a letter of demand to notify. A complaint, an unhappy email, or a mistake you notice yourself can be notified as a circumstance. If you give the insurer written notice of the facts as soon as reasonably practicable after you become aware of them, and before the policy ends, a claim that later arises from them can be covered by that policy, even if the claim arrives after the policy ends. Send the notice to your broker or your insurer, and keep a copy. Waiting can mean the problem becomes a known circumstance that your next policy excludes. How claims-made timing works.
What happens next
- The insurer assesses it. They may ask for documents and a statement from you.
- They may appoint lawyers. If the claim is covered, the insurer usually appoints and pays a panel lawyer to act for you.
- Defence costs are paid. Depending on the policy, they may be paid on top of your limit or within it.
- You pay the excess. Usually once per claim. The policy says whether it applies to defence costs.
- The insurer manages the outcome. That can mean defending the claim, negotiating, or settling. Many complaints end without any payment.
Keep the relationship calm
You can still talk to your client about the work and fix a simple problem, as long as you do not admit liability or pay compensation without consent. Ask your broker first if you are unsure what you can say.
If the client has not paid you, talk to your broker before you push hard on the invoice. PI will not pay the unpaid fee, but it can respond to a negligence claim the client makes in reply, and chasing an unhappy client is often how that claim starts. How most PI claims start.
Common questions
Should I tell my insurer about a complaint that is not a claim yet?
Yes. Notice in writing to your broker or insurer, given as soon as reasonably practicable and before the policy ends, can mean that policy covers a claim that arises from it later.
Can I offer my client a refund to make it go away?
Not without your insurer's consent. A payment or settlement you agree yourself can prejudice the insurer and may not be covered.
Who pays for my lawyer?
If the claim is covered, the insurer usually appoints and pays a lawyer for you, after you pay any excess.