Why insurers are evolving PI for modern risks

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Hiscox refining coverage to tackle new liabilities, tightening regulations and risks clients don’t see coming

FOR YEARS, professional indemnity insurance was like an off-the-rack suit – designed to fit most people well enough but not tailored to anyone’s exact measurements. But as industries get more specialised, the gaps in these one-size-fits-all policies are harder to ignore. Relying on broad policies that cover the basics while leaving businesses to figure out the fine print on their own is no longer working. Professional indemnity (PI) insurance isn’t like other policies – it provides cover for all the advice you have given in the past. The claims being paid today often stem from advice or professional services given years ago, sometimes under very different regulatory or business conditions. That’s why getting policy wordings right from the start matters. A PI product that looks solid now can quickly become outdated if it doesn’t account for how professional risks shift over time. Brokers can find themselves asking, Are these policies actually built for the risks my customers face today?

Hiscox is an international specialist insurer, underwriting a diverse range of personal and commercial insurance risks. Listed on the London Stock Exchange and headquartered in Bermuda, we currently have over 3,000 staff across 13 countries and 32 offices. In the UK and Ireland, we have a long history and expertise in providing specialist insurance for higher-value homes and their contents, valuables and collections. We also insure over 180,000 SMEs and professionals and design profession-specific policies that you can tailor to suit your clients’ needs. Claims service is at the heart of our business, and our philosophy is that superior claims handling should be based on fairness and common sense. Who we insure remains just as important as what we insure. We don’t behave like a typical insurance company, and we remain committed to providing an extraordinary quality of service.

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“Innovation typically attracts risk. And risk can deter investment or partnerships. But risk – that’s our stock-in-trade. We can take that risk out of the equation and allow businesses to move forward”

Liam Barry, Hiscox

Liam Barry, underwriting manager at Hiscox, has spent years tackling this problem from the inside. Having worked across multiple teams – from schemes to regional teams to eTrade – he’s seen how PI products succeed and where they fall short. Hiscox, he says, recognised early on that professional services were outpacing the generic PI insurance that was meant to protect them. Instead of layering on endorsements and hoping for the best, Hiscox has taken a different approach: redesigning PI policies with specific industries in mind and understanding the sectors they serve in depth. For brokers, this means that the PI market is splitting into two distinct tracks. Some risks will be easier and quicker to place digitally, while others will require expert underwriting, tailored policy wording and a deeper understanding of emerging liabilities. For Hiscox, the focus has been on identifying sectors where PI coverage needs to be more precise. “We’re a specialist insurer,” Barry says. “We don’t provide every mass market insurance product. When it comes to our core products, such as professional indemnity or cyber, we look to create innovative products that drive customer value in the sectors we have an innate understanding of.”

One example of how professional risks are shifting can be seen with estate agents and letting agents. Hiscox writes a number of these risks, and Barry notes that deposit protection legislation has created an increased liability for these customers. As a consumer protection measure, it means agents are now held to a much higher standard regarding how they handle money and a stricter liability if they don’t adhere to the new rules. “This wasn’t a risk that existed before,” he says. “Of course, they always had an obligation to safeguard deposits, but now there’s a stricter regulatory framework around it.” For brokers, this means that estate agent customers need

From generic policies to industry-specific solutions

Published April 7, 2025

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“It’s about making sure a claim doesn’t turn into a debate over intent. We want brokers to feel confident that if something happens, the policy will respond as expected”

Liam Barry, Hiscox

coverage that accounts for this increased liability. Hiscox has adjusted its PI offering to reflect these new legal responsibilities while also recognising that not every part of the profession carries the same risk. “On one hand, you have heightened exposure from deposit protection laws. On the other, traditional estate agency work has arguably become lower risk because of platforms like Rightmove, which standardise how properties are marketed,” Barry explains. “So, it’s about balancing the real risk against areas where exposure has actually decreased.” One area where this has been especially important is financial and environmental risks. Hiscox, for example, has had to rethink its approach to carbon credit fraud and feed-in tariffs – both relatively new exposures that weren’t major considerations in PI underwriting just a few years ago. Hiscox understands their customers have a developing exposure for issues such as enhanced energy tariffs or carbon credit fraud. “With any financial instrument that technically has a value, there is the chance of fraudulent activity,” Barry says. “A lot of our customers rely on third parties for these, and if one of their suppliers is found scrutinized, that can reflect poorly for our insureds’ reputation, which could impact multiple customers, not just a single piece of work.”

“We review our products regularly and we thought, ‘We can do better than that,’” Barry says. “So instead of an outright exclusion, we made it clear what we were covering, incorporated some best practices into the wording, and ensured that customers who follow those best practices are protected.” Barry emphasises that brokers play a crucial role in identifying these shifts early. “The challenge is making sure we recognise when policies need to change, rather than just assuming the old coverage still works.”

“Brokers know that the true test of a PI policy comes when a claim is made. A well-structured policy should work in practice, not just on paper. Having PI policies that more closely reflect customers and the sectors they operate in allows for a clearer, faster claims service. “If we’re not seeing enough claims, that’s as worrisome as seeing too many,” Barry says, emphasising that working with the claims team and reviewing claims data can be useful tools for shaping better policies and ensuring customer value. “Fewer claims could mean customers don’t understand their coverage or they have PI in place for infrequent but serious claims.” An interesting takeaway from working with their award-winning claims team has been the rise of breach-of-contract claims. Traditionally, PI insurance focused on negligence – mistakes that led to financial loss. But in today’s professional landscape, many disputes stem from contractual obligations rather than outright negligence. “Breach of contract used to be secondary to negligence, but now it’s leading the way in some sectors,” Barry explains. “That’s why we’ve adjusted certain PI products to explicitly cover contractual liabilities where it makes sense to do so.”

How claims data shapes better policies

Brokers who specialise in PI will recognise the challenge of silent coverage gaps – those areas where a policy is neither explicitly inclusive nor exclusive. Hiscox has been working to eliminate ambiguity, ensuring that customers know exactly what they’re getting. “It’s about making sure a claim doesn’t turn into a debate over intent,” Barry says. “We want brokers to feel confident that if something happens, the policy will respond as expected.” An industry-wide example of this was to address the challenges of “Silent Cyber”. Rather than leaving cyber exposures open to interpretation across multiple insurance

products, Hiscox made deliberate and clear decisions about where cyber risks sit within its PI products, ensuring that brokers and clients aren’t left guessing. In their new Sustainability and Environmental PI product, Hiscox has added clear definitions and coverage for pollution and customers relying on environmental certificates or, where they are responsible, for applying for special energy tariffs on a customer’s behalf.

While Hiscox is adapting its PI products to meet new industry challenges, Barry emphasises that one thing hasn’t changed: the company’s core values. Integrity, he says, is central to underwriting. “Doing the right thing is fundamental. And so is taking ownership. That applies whether we’re talking about a broker placing a risk or an underwriter structuring a policy. It’s about making sure that what we’re doing works for the customer.” This approach also means being willing to take risks. Barry acknowledges that PI insurers have a role to play in enabling businesses that drive change – especially in sectors like sustainability and emerging technologies. “Innovation typically attracts risk,” he says. “And risk can deter investment or partnerships. But risk – that’s our stock-in-trade. We can take that risk out of the equation and allow businesses to move forward.” This is particularly important when insuring socially and environmentally focused organizations. “Some people take huge risks, and it’s not for personal gain – it’s because they want to leave the world a better place than they found it,” Barry says. “That’s amazing. And just because something is new or unfamiliar doesn’t mean we should shy away from insuring it. We need to keep innovating to support businesses that are doing something different.” For brokers, the message is clear: PI insurance is evolving, and clients expect coverage that reflects the real risks they face today. Hiscox is taking a proactive approach, ensuring that its PI products are clear, responsive and built for the specialist sectors they serve. “I don’t think of this as rewriting the rulebook,” Barry says. “It’s about making sure the rules actually match how businesses work today.”

Balancing risk and responsibility: the future of PI

Professional indemnity products have evolved from generic wordings to sector-specific policies

Hiscox supports socially and environmentally driven businesses by underwriting innovative risks, even where uncertainty is higher, encouraging positive change

Complex underwriting benefits from enhanced data integration and automation

Hybrid professions and AI-driven services are reshaping risk profiles, prompting broader policy coverage

Adapting Professional Indemnity to emerging risks

Appreciate the value of broker partnerships through schemes, collaborating with specialists who deeply understand niche customer sectors

Hiscox develops products using direct customer and broker feedback

Claims insights are central to refining products – underwriting and claims teams collaborate to ensure fair value and customer protection

Balancing risk and reward is critical; too few claims can be as concerning as too many, requiring careful portfolio management

Shaping customer-centric solutions through experience

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For insurers, the easy response to systemic risks – risks that could impact multiple customers – is to exclude them entirely – but that can leave brokers and clients frustrated when they realize a major business risk isn’t covered. Hiscox has taken a different approach. “Where possible, we try not to exclude things outright,” Barry explains. “We’ve been specific about the cover, managing it carefully in the wording. The cover is there, it’s clear what we’re giving, but we’ve also taken steps to balance the risk.” A similar process played out with feed-in tariffs, a government-backed scheme designed to promote renewable energy by guaranteeing payments for excess electricity generated. Initially, Hiscox excluded claims related to feed-in tariffs, concerned about the complexity and unpredictability of the exposure. But over time, as their understanding of the sector improved, the stance shifted.