How does turnover affect your professional indemnity premium?

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05

When you request a professional indemnity (PI) quote, one of the first questions any insurer asks is your annual turnover or fee income. It is rarely a formality. For most professions, this figure is the primary rating factor: the number that does most of the work in setting your premium before any other detail is considered.

This page explains why turnover matters so much, how insurers use it, and what else combines with it to produce your final price. If you would rather see your own figure, you can start a PI quote and declare your turnover as the first step.

Why insurers rate on turnover

Professional indemnity responds to claims of negligence, error or breach of professional duty. The risk an insurer takes on is directly linked to how much work you do and how valuable that work is to your clients. Turnover is a clean, verifiable measure of that exposure.

Put simply, a firm billing a large amount each year is handling more instructions, more advice and more deliverables than a smaller firm. More work means more opportunities for something to go wrong, and each engagement is a potential claim. Turnover captures that volume in a single figure, which is why it sits at the centre of nearly every PI rating model.

Some insurers use fee income specifically rather than total turnover, particularly for firms that pass through disbursements or third-party costs. The distinction matters, because declaring the wrong basis can distort your premium in either direction.

Turnover as a proxy for exposure

Insurers cannot inspect every piece of advice you give, so they rely on indicators that correlate with risk. Turnover is the strongest of these because it reflects three things at once:

• Volume of work — how many clients and engagements you take on in a year.
• Value of work — larger contracts tend to carry larger potential losses if something fails.
• Scale of the business — a broad indicator of how much is at stake across your client base.

Because turnover bundles these together, it lets an insurer price a wide range of firms consistently. It is not a perfect measure — a low-volume firm doing high-value work can carry significant risk — which is why turnover is the starting point rather than the whole calculation.

How a change in turnover moves your premium

As a general rule, premium rises with turnover, but the relationship is not always a straight line. Many insurers apply banded rates or a tapering rate as turnover increases, so premiums often grow more slowly at the top end than at the bottom. The table below shows the typical direction of travel.

Because most PI policies carry a minimum premium, a drop in turnover will not always cut your cost proportionally. Below a certain point, the insurer's fixed cost of providing cover sets the floor.

What else combines with turnover

Turnover sets the baseline, but insurers layer several other factors on top of it. Two firms with identical turnover can pay very different premiums once these are applied:

• Profession and activities — a surveyor, an IT consultant and an accountant carry different risk profiles even at the same turnover.
• Indemnity limit — the cover you select, commonly offered as generic options such as £1m, £2m or £5m, directly affects price.
• Claims history — past claims or circumstances tend to increase premiums and can narrow the market willing to quote.
• Excess — a higher self-insured excess can reduce the premium.
• Client base and contract type — work for large corporates or overseas clients can raise the rating.
• Experience and controls — qualifications, procedures and quality checks can all influence an insurer's view.

This is why turnover on its own does not tell you what you will pay. It anchors the calculation; the rest shapes it.

Declaring turnover accurately

Because turnover is a rating factor, it is also a material fact. Under the Insurance Act 2015, business policyholders have a duty of fair presentation, which means disclosing information accurately and in a way that is not misleading. Understating turnover to reduce a premium can leave a claim exposed to a proportionate reduction or, in serious cases, allow the insurer to avoid the policy.

A few practical points help you declare correctly:

• Use a realistic forecast for the coming year, not just last year's accounts, if you expect growth.
• Be clear whether the insurer wants total turnover or fee income net of disbursements.
• Split turnover by activity if you have distinct income streams, as some carry higher rates than others.

A broker can confirm the right basis and present your figures fairly across the market. Request a quote and we will make sure your turnover is declared in a way that protects your cover and reflects your risk fairly.

Common questions

Does my premium fall automatically if my turnover drops?

Not always. Premium usually reduces with a lower turnover, but most PI policies carry a minimum premium, so there is a floor below which the price will not fall regardless of income.

Should I declare turnover or fee income?

It depends on the insurer's question. Some rate on total turnover, others on fee income net of pass-through costs. Declaring the wrong basis can distort your premium, so check what is being asked or ask your broker.

What if my turnover grows significantly mid-policy?

Tell your broker or insurer. A large increase changes your risk, and the insurer may adjust cover or ask for a revised declaration at renewal. Keeping them informed protects your position at claim stage.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.