Learn when to notify your insurer of a claim or potential claim under your PII policy. Avoid coverage issues with this essential guide for all professionals.
Whether you’re a lawyer, doctor, engineer, architect, chiropractor, or consultant, Professional Indemnity Insurance (PII) is your shield against legal claims alleging professional negligence, errors, or omissions.
But did you know your right to claim can be affected simply by when—or if —you notify your insurer?
Here’s an essential guide for professionals on when to notify, what to include, and how to protect your entitlement under your PII policy.
When Should You Notify Your Insurer?
You must notify your insurer immediately if you become aware of:
1. A Formal Claim
This includes:
- Legal demand letters
- Writs, summonses, or court notices
- Counterclaims, third-party claims, or arbitration notices
Example: A former client sends you a legal letter accusing you of negligence and demanding compensation.
2. A Potential Claim
Even if no formal action has been taken yet, you must notify the insurer if:
- You discover an error or omission in your professional service
- A client expresses dissatisfaction that could lead to legal action
- There’s a complaint filed with your licensing board or regulatory body
Example: You realise you’ve miscalculated a structural load in a project or missed a filing deadline for a client.
Why Timely Notification Matters
PII operates on a “claims-made ” basis. This means:
- Only claims made and reported during the policy period are covered
- If you delay or fail to notify within the timeframe specified (usually immediately or within 30–60 days), the insurer may reject your claim— even if you’re not at fault
Tip: When in doubt, notify early. It’s better to report a potential issue that doesn’t escalate than to miss your chance entirely.
How to Notify a Claim or Potential Claim
Here’s what you should prepare when notifying your insurer:
Step 1: Write a Notification Email
Subject line:
“[Your Name/Business Name] – Notification of Claim/Potential Claim”
Step 2: Include the Following Details:
- Date of awareness: When did you first learn of the issue?
- Summary of the issue: Brief description of the error, complaint, or incident
- Parties involved: Client names, colleagues, or other professionals involved
- Allegations (if any): What is being claimed against you?
- Timeline or deadlines: Is there a response deadline or court date?
- Contact person: Name and contact of the person responsible in your form
Step 3: Attach Relevant Documents
Include any of the following:
- Demand letters or notices
- Emails or correspondence from clients
- Official complaints or regulatory notices
- Any evidence of the incident (photos, reports, etc.)
What Not to Do Before Notifying
❌ Do not admit liability or apologise formally
❌ Do not offer compensation or settle directly with the client
❌ Do not delay thinking it might go away—early notice is safer
❌ Do not assume it’s “too minor” to report
What Happens After You Notify
Once notified, your insurer will:
- Acknowledge receipt and possibly send a Claim Notification Form
- Assign a claims handler to investigate the issue
- Advise if a panel solicitor or legal counsel will be appointed
- Work with you to manage defense costs, settlements, or regulatory response
Final Thoughts
Your Professional Indemnity Insurance is only effective if you use it correctly. The #1 mistake professionals make is failing to notify their insurer in time.
Don’t let fear, doubt, or pride stop you from protecting your livelihood.
Notify early. Disclose honestly. Follow your policy’s terms.