How much is professional indemnity insurance for IT contractors?
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
If you contract as a developer, systems consultant, project manager or infrastructure specialist, professional indemnity is usually the cover your clients ask for by name. The natural next question is what it costs — and the honest answer is that it depends. Rather than quote a figure that would be wrong for most readers, this guide explains the specific factors that move an IT contractor's PI premium up or down, so you can see what you can influence and what a broker does with the rest. Apex works across 10 principal PI specialisms, with a separate page on getting IT consultant PI placed by a specialist.
What professional indemnity actually covers
PI insurance responds when a client alleges your professional work caused them a financial loss — and it covers your legal defence costs as well as any damages. For IT contractors, typical triggers include an error in code that causes downtime, a project that fails to meet an agreed specification, a missed deadline that costs the client money, or an allegation that you infringed intellectual property or lost sensitive data. It is the cover that lets you take on work you would otherwise be exposed by.
The five drivers that move your premium
Insurers price PI on risk. For IT contractors, these are the levers that matter most.
| Driver | Why it moves the price |
|---|---|
| Turnover / fee income | The main rating factor. Higher annual fees suggest larger contracts and bigger potential losses, so premium generally rises with income. |
| Activities you perform | Advisory and bespoke development carry more exposure than routine support or testing. The riskier the work, the higher the rate. |
| Cover limit chosen | A higher indemnity limit (£1m vs £5m) costs more — but the increase is rarely proportional. Often set by your client contract. |
| Claims & disputes history | Prior claims, or circumstances that could become claims, increase premium. A clean record helps keep it down. |
| Sector & client risk | Work for banks, healthcare or critical national infrastructure is rated higher than lower-stakes commercial projects. |
Two IT contractors with the same job title can pay very different premiums because these factors combine differently. This is exactly why an accurate, complete proposal matters — and why getting a tailored quote beats any online ballpark.
Choosing a cover limit: £1m, £2m or £5m
The indemnity limit is the maximum an insurer will pay for a claim (check whether it is per claim or in the aggregate). It is one of the few drivers you actively choose — but often the choice is made for you by the client contract or the framework you are working under.
- £1m — a common entry point for independent contractors on smaller commercial engagements where the client has not specified a higher figure.
- £2m — frequently requested in contractor agreements and by recruitment agencies placing IT contractors into larger organisations.
- £5m — typical where you work with enterprise clients, the public sector, or on projects handling significant data or financial systems.
Because moving from £1m to a higher limit usually adds less than you might expect, it is often worth checking the cost of the next tier up rather than defaulting to the minimum a contract allows.
Need a limit that matches your contract, without paying for cover you don't need? We arrange PI for IT contractors across the UK.
Get a PI quote →What you can do to keep the premium sensible
You cannot change the fact that IT work carries professional risk, but you can influence how insurers see yours:
- Give an accurate turnover figure and a clear description of what you actually do — over-stating scope inflates the rate.
- Use written contracts with defined deliverables, so the boundaries of your responsibility are clear if a dispute arises.
- Choose a limit that meets your contracts rather than the highest available — and review it when your work changes.
- Maintain continuous cover. PI is written on a "claims made" basis, so a gap can leave past work uninsured.
How a broker helps with the cost
A broker's job is not simply to find the cheapest number. It is to place your risk with insurers who genuinely understand IT contracting, so the wording actually responds when you need it. At Apex we take your details once, present them accurately to relevant insurers, and explain the trade-offs between limit, excess and price — including the "claims made" and retroactive-date points that catch contractors out. That means you pay a fair premium for cover that fits your contracts, rather than guessing from a generic online figure.
Common questions
Do my clients decide how much PI I need?
Often, yes. Many IT contracts and recruitment agencies specify a minimum indemnity limit — commonly £1m, £2m or £5m — as a condition of the engagement. Check the contract before you buy, and make sure the limit and any wording requirements are met.
Why can't you just tell me a price?
Because PI is individually rated. Your fee income, activities, chosen limit, claims history and the sectors you serve all feed into the premium. Any single "average" would be misleading for most contractors. A short proposal gives you a figure that is actually yours.
Is professional indemnity legally required for IT contractors?
There is no general statutory requirement for IT contractors to hold PI. In practice, though, it is usually a contractual requirement imposed by clients or agencies — so you often cannot start the work without it.
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.