How much is professional indemnity insurance for IT consultants?
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
“How much is it?” is the first question most IT consultants ask, and the honest answer is that it depends on your specific risk profile. Two consultants with identical revenue can pay very different premiums because one writes bespoke software for regulated banks and the other advises on office IT procurement. Below we explain the drivers that move the number, so you know what to expect before you request a quote.
What professional indemnity actually covers
PI insurance responds when a client alleges that your professional work caused them financial loss — for example negligent advice, a coding error, a project that fails to deliver, missed specifications, breach of contract or an intellectual-property infringement claim. It typically funds your legal defence costs and any damages or settlement you become liable to pay. For IT consultants, many clients now make PI cover a contractual condition of engagement, so it is often a commercial necessity rather than an optional extra.
The main drivers of your premium
Insurers build your price from a handful of factors. Understanding them helps you see why quotes vary and where you have some influence.
| Driver | Why it matters |
|---|---|
| Turnover / fee income | Higher revenue usually means larger contracts and greater potential loss, so it is a primary rating factor. |
| Nature of activities | Bespoke development, systems integration and giving advice carry more exposure than reselling hardware or basic support. |
| Cover limit chosen | A higher indemnity limit (£1m vs £5m) increases the insurer’s maximum exposure and the premium with it. |
| Claims history | Previous claims or known circumstances signal risk; a clean record helps. |
| Sector risk | Work for finance, healthcare, government or critical infrastructure is rated more cautiously than lower-stakes clients. |
| Contract size & concentration | One very large client or contract can raise concern about a single significant claim. |
| Excess & qualifications | A higher voluntary excess and relevant experience or certifications can moderate terms. |
Notice what is not on the list: there is no fixed “IT consultant rate.” The premium is assembled from your answers, which is why an accurate proposal form matters so much. Start your quote here and the questions will map directly onto these drivers.
Choosing a cover limit: £1m, £2m or £5m
The indemnity limit is the maximum the policy will pay for a claim (or in aggregate across the policy year). It is one of the biggest levers on price and the one you actively decide. Common options for IT consultants are:
- £1m — often the entry point for independent consultants with smaller contracts and lower-risk clients.
- £2m — a frequent middle ground, and a level many mid-market and enterprise clients specify in their supplier contracts.
- £5m — typical where you work with large corporates, the public sector or high-value data and systems, or where a framework agreement demands it.
Do not simply buy the cheapest limit. Check your client contracts first: many stipulate a minimum PI limit, and being under-insured against a contractual requirement can cost you the engagement. A limit that looks generous today may be inadequate against the value of the system you are building.
Why the “claims-made” basis matters
PI is almost always written on a claims-made basis. That means the policy in force when a claim is made against you responds — not the one in force when you did the work. Two practical consequences follow. First, keep cover continuous; a gap can leave past work unprotected. Second, when you stop trading or move on from a client, consider run-off cover, which protects against claims arising from past projects after you have ceased the activity. These features affect both your protection and your cost, and are easy to overlook when buying online alone.
How to present your business to get fair terms
You can influence your premium by describing your business clearly and accurately:
- Give a realistic turnover or fee-income figure — over-stating inflates the price, under-stating can prejudice a claim.
- Describe your actual activities precisely; distinguish advisory work from hands-on development or integration.
- Use written contracts with clear scopes, limitations of liability and acceptance criteria — disciplined risk management reassures insurers.
- Disclose any past claims or circumstances honestly, in line with your duty of fair presentation under the Insurance Act 2015.
- Highlight relevant certifications, testing regimes and quality processes.
Get PI terms tailored to how you actually work — not a one-size-fits-all rate.
Get a PI quote →How a broker helps with the cost
An independent broker adds value beyond fetching a number. We translate your business into the language insurers use, approach markets that understand IT and technology risk, and compare terms on cover — not price alone. That includes checking the wording covers the work you genuinely do (bespoke software, cloud, integration, IP, data), that the limit meets your client contracts, and that excesses and exclusions are reasonable. When a claim or awkward circumstance is involved, a broker can present it in context so it is understood rather than simply penalised. The result is cover that responds when you need it, at a fair price for the risk you carry. specialist PI broking exists precisely because wording variability between insurers is high.
Common questions
Is PI insurance a legal requirement for IT consultants?
There is no general legal obligation, but it is frequently a contractual requirement — many clients, frameworks and platforms will not engage you without it, often at a specified minimum limit.
Can I lower my premium by choosing a lower limit?
A lower limit usually reduces the premium, but check your client contracts first. Being under the limit they require can cost you the work, and a lower limit may not cover a serious claim. Balance affordability against genuine exposure.
What happens if I stop consulting — am I still covered?
Because PI is claims-made, once you stop paying premiums the cover ends. To protect against claims from past projects, ask about run-off cover, which keeps you protected for work already delivered.
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.