How to Compare Professional Indemnity Quotes Properly

Two PI quotes are rarely the same product. Work through these six features before you look at the premium, and the cheapest quote may stop looking cheap.

Why the cheapest quote is often not the cheapest

When two professional indemnity quotes arrive with different premiums, the natural reading is that one insurer is cheaper than the other for the same thing. In PI, that assumption fails more often than it holds. Premium differences frequently reflect product differences: a narrower definition of your activities, a less generous limit basis, a bigger excess applied more widely, a later retroactive date, or exclusions that cut across part of your work. The quote is cheaper because it covers less — you just cannot see that from the number.

Comparing PI quotes properly means putting the documents side by side and working through a short list of features before you look at price at all. Here is that list.

1. Limit basis: any-one-claim or aggregate

The limit of indemnity can apply in two fundamentally different ways. On an any-one-claim basis, the full limit is available for each and every claim made during the policy period. On an aggregate basis, the limit is the total available for all claims in the year combined; a policy exhausted by one large claim has nothing left for a second. Some aggregate policies include one or more reinstatements, which restore the limit after a loss — check whether they do, and on what terms.

Two quotes with the same headline limit, one any-one-claim and one aggregate, are materially different products. Client contracts and professional body rules often specify which basis is required, so check the requirement before you compare. Related: check whether defence costs are payable in addition to the limit or included within it. Costs-inclusive cover erodes the limit as legal fees accumulate, which matters greatly in disputes that run.

2. Excess structure

Look past the excess amount to how it applies. Does it apply to each and every claim? Does it apply to defence costs as well as damages, or to damages only? An excess that does not apply to costs is meaningfully better in a class where many matters generate legal fees but settle without a damages payment. Check too whether related claims can be aggregated into a single excess, and whether any additional or doubled excess applies to particular activities. A lower premium purchased through a heavier or wider excess is a financing choice, not a saving — which may still be a sensible choice, provided you make it knowingly.

3. Retroactive date

PI is claims-made: the policy in force when a claim is made responds, but only for work performed after the retroactive date. If your current policy carries a retroactive date reaching back to when your firm first took out cover, and a competing quote offers a retroactive date at inception of the new policy, the new quote excludes your entire back book of work. That can be the single largest difference between two quotes, and it is invisible in the premium. When changing insurer, preserving your existing retroactive date should normally be treated as a requirement, not a preference. Any quote offered on a restricted retroactive basis needs to be understood and priced as the very different product it is.

4. The activities definition

The policy covers claims arising from your defined professional activities — and only those. Read the definition in each quote and test it against what your firm actually does today, not what it did when cover was first arranged. Mixed practices are where this bites: consultancy plus software, design plus project management, advice plus training. If part of your work falls outside the definition in one quote but inside it in another, the quotes are not comparable until that is fixed. This is also the feature most worth negotiating: a broker can often have a definition widened or clarified by endorsement before you buy, which is much easier than arguing about it after a claim.

5. Exclusions and extensions

Wordings differ in what they carve out and what they add back. Work through the exclusions in each quote asking one question: does this touch anything my firm does or has done? Common points of difference include treatment of contractual liability beyond your ordinary duty of care, particular types of advice or projects, and territorial or jurisdictional limits — important if you have clients or projects overseas. On the other side of the ledger, compare extensions and additional covers, and check any conditions attached to them. An illustrative example: two quotes for a consultancy differ in that one excludes liability assumed under a collateral warranty beyond the ordinary duty of care. If your clients require collateral warranties, that difference matters more than any plausible premium saving.

6. Insurer security and service

A PI policy is a promise that may need to be kept many years after you buy it, because today's work can generate tomorrow's claim. That makes the insurer's financial strength and long-term commitment to the class part of the comparison. Look at the insurer's financial strength rating from the recognised agencies, and ask how long they have written professional indemnity in your sector. Claims service belongs here too: an insurer's reputation for handling PI claims constructively is worth asking your broker about, since your broker sees claims outcomes across many clients and you see only your own.

Putting it together: a like-for-like discipline

A practical method: build a one-page grid with a row for each feature above — limit and basis, defence costs treatment, excess and its application, retroactive date, activities definition, material exclusions, extensions, insurer security — and a column for each quote. Fill it in from the documents, not from the covering emails. Where a cell cannot be filled in confidently, ask; where a feature differs, either have it equalised by endorsement or price the difference consciously. Only when the grid is level does the premium comparison mean anything.

Done this way, comparing quotes usually reaches one of two good outcomes: the cheaper quote survives scrutiny and you buy it with confidence, or the comparison reveals that the quotes were never like for like and you choose cover on substance. Both beat the common alternative — buying the lowest number and finding out what it meant at claim time. If you would rather not run this exercise alone, it is precisely the work a specialist broker does before any recommendation reaches you.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952).