Why Do We Request No Claims & Material Facts Declarations for PI?
1 May 2025
If you’re used to placing property or motor risks, you may not come across No Claims Declarations (NCDs) as frequently. However, when it comes to Professional Indemnity (PI) insurance, these declarations play a critical role in ensuring cover is placed correctly—and that any future claims are fully covered.
A No Claims & Material Facts Declaration confirms that the insured has:
- made no claims (other than those already declared)
- no known circumstances that might give rise to a future claim
- no changes to material facts that could impact policy coverage
Unlike property or motor policies, PI insurance is written on a claims-made basis. This means cover is triggered when a claim is made and reported during the policy period—not necessarily when the event occurred (subject to any retroactive date).
Because of this structure, full disclosure at the point of inception is vital. If an insured is aware of an incident or circumstance but fails to disclose it, the insurer may have grounds to deny a claim—even if the actual claim is made during the policy term. The NCD gives us confidence that all relevant information has been declared and that the risk is being underwritten on a sound basis.
When Is A No Claims Declaration Particularly Important?
1. Proposal Form Over 30 Days Old
If there’s a delay between completing the proposal form and the policy inception, the insured’s circumstances or claims history may have changed. To ensure we’re working with the most current information, an up-to-date NCD is required.
2. Backdated Inception Dates
Where the policy inception date is backdated, we need to be certain that no new issues have arisen between the date of the proposal and the backdated start of cover. The NCD confirms there have been no developments that could impact the policy.
Why It Matters For Brokers
Having a signed NCD protects brokers as well as insurers. It provides a clear, dated record that the client has reviewed and confirmed the accuracy of their declarations. This can be crucial if a claim arises and helps demonstrate your role in ensuring full disclosure. Ultimately, it supports the validity of the policy and reduces the risk of disputes later on.
Requesting a No Claims & Material Facts Declaration is a simple but important step that helps protect your client’s cover and supports your role in ensuring full disclosure. In PI, where prior knowledge matters, it’s an effective way to avoid issues further down the line.
If you have any queries, please contact our PI team on 0333 032 5000 or via our online chat — we’re here to help.