How much professional indemnity insurance do I need?

Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05

Professional indemnity insurance covers the cost of defending and settling claims that you gave negligent advice, made an error, or failed to deliver a professional service to the required standard. The hardest question is not whether to buy it, but how much cover to carry. Buy too little and a single claim can exceed your limit, leaving you personally exposed. Buy far more than you could ever need and you pay for protection you will never use. This guide gives you a framework for deciding, rather than a number that will be wrong for most readers.

Start with the regulatory minimum

Some professions must carry PI cover as a condition of practising, and their regulators set a floor you cannot go below. If a minimum applies to you, that is your starting point, not your target.

• Solicitors: the Solicitors Regulation Authority (SRA) Minimum Terms and Conditions require at least £2 million of cover for any one claim for sole practitioners and partnerships, and at least £3 million for firms incorporated as companies or LLPs.
• Accountants: bodies such as ICAEW and ACCA require members in practice to hold PI cover, typically calculated as a multiple of gross fee income subject to a minimum limit.
• Chartered surveyors: RICS sets minimum levels of indemnity based on a firm's turnover, with specified terms including run-off cover.
• Architects: the Architects Registration Board Code and RIBA require members to hold adequate and appropriate insurance.
• FCA-authorised firms: many regulated firms, including insurance and mortgage intermediaries, must hold PI cover meeting minimum limits set out in the FCA Handbook (for example the MIPRU rules), which are expressed partly in euros and revised periodically.

Two points matter here. First, a regulatory minimum is a legal floor designed to protect clients, not a considered assessment of your actual exposure. It is common for professionals to need considerably more. Second, regulator wordings often prescribe features beyond the limit itself, such as how claims aggregate or a mandatory run-off period, so always read your own body's rules rather than relying on a general figure.

Then check what your contracts demand

Even if no regulator forces a minimum on you, your clients often will. Larger organisations, the public sector, and framework agreements routinely specify a required PI limit in their contracts, frequently £1 million, £2 million or £5 million per claim, sometimes more for high-value or safety-critical work. If you sign a contract that requires a £5 million limit and you carry £1 million, you are in breach and, more importantly, uninsured for the gap.

Practical rules for the contract test:

• Read the insurance clause before you sign, not after a dispute. Note the required limit and whether it is "each claim" or "in the aggregate".
• Watch for clauses requiring you to maintain cover for a number of years after the work ends. Professional negligence claims can surface long after a project completes.
• If one important client demands a higher limit than the rest of your book, it is usually cheaper to raise your single policy limit than to arrange separate cover.

Tell us what your contracts require and we can size a policy that satisfies your toughest client without over-insuring for the rest.

Size it to the value and risk of your work

Where no minimum or contract dictates the figure, the honest test is: what is the most a client could plausibly lose if you got it badly wrong, and what would it cost to defend that allegation? PI cover pays defence costs as well as damages, and legal costs alone in a contested professional negligence claim can be substantial even where you ultimately did nothing wrong.

Ask yourself:

• What is the financial size of the projects or transactions you touch? An adviser working on a £10 million transaction carries very different exposure from one handling £50,000 engagements, even at the same fee level.
• Could one error cascade? A flawed design, a repeated calculation, or standard advice reused across many clients can produce several claims from a single mistake.
• How long does your work stay live? Advice that clients rely on for years leaves a longer tail of potential claims.

Your fee income is a poor guide to your exposure. The loss a client suffers is driven by the value at stake in their project, not by what you charged to advise on it. That mismatch is exactly why professional indemnity exists.

Aggregate vs each-and-every claim: the limit that catches people out

How your limit applies matters as much as its size. There are two common structures, and confusing them is one of the most expensive mistakes a professional can make.

Each claim (any one claim). The full limit is available for every separate claim in the policy year. If you carry £2 million each claim and face three unrelated claims, each has its own £2 million available. This is generally the stronger structure and is what many regulator wordings require.

Aggregate. The limit is the total the insurer will pay for all claims in the year combined. A £2 million aggregate limit facing three claims must stretch across all of them. Once exhausted, later claims in that year are uninsured.

Two related concepts sit alongside this. Aggregation clauses decide when several matters are treated as a single claim, for example where they arise from one originating cause or a series of related acts. Where multiple claims aggregate into one, that helps under an aggregate limit but can hurt under an each-claim limit if it merges what you hoped were separate recoveries. And a policy excess is the amount you pay on each claim before cover responds. When you compare quotes, compare the basis of the limit, not just the headline figure: £2 million each claim and £2 million in the aggregate are very different products.

A simple way to arrive at your number

Work through the four tests in order and take the highest:

• 1. Regulatory floor. Identify any minimum your professional body sets. You cannot go below it.
• 2. Contract demand. Find the highest limit any current or target client requires.
• 3. Worst credible loss. Estimate the largest realistic claim, including defence costs, from the value of the work you do.
• 4. Aggregation headroom. Consider whether one error could generate several claims in a year, and prefer an each-claim basis or a higher limit if so.

Your limit should be the highest of these four, with the structure (each claim versus aggregate) chosen deliberately. Revisit it whenever you take on larger clients, move into higher-value work, or sign a contract with a stiffer insurance clause.

One more duty: present your business fairly

Choosing the right limit only helps if the policy responds when you claim. Under the Insurance Act 2015, a commercial policyholder owes a duty to make a fair presentation of the risk to the insurer, disclosing what you know or ought to know that a prudent insurer would want to consider. Answer proposal questions accurately, disclose known circumstances that could give rise to a claim, and keep your broker informed of material changes. A well-sized limit is little use if a careless presentation gives the insurer grounds to reduce or reject a claim.

Common questions

Is professional indemnity insurance a legal requirement in the UK?
Not for most businesses in general terms, but it is mandatory for certain regulated professions, including solicitors, and for many FCA-authorised firms, where the relevant regulator sets minimum cover as a condition of practising. Even where it is not compulsory, client contracts frequently make it a practical necessity.

What is the difference between an each-claim and an aggregate limit?
An each-claim (any one claim) limit provides the full sum for every separate claim in the year. An aggregate limit is the total for all claims combined in the year; once used up, later claims are uninsured. For the same headline figure, an each-claim basis generally offers stronger protection.

Do I still need PI cover after I stop trading?
Often yes. Negligence claims can arrive years after the work was done, so run-off cover protects you for past advice once you cease practising or retire. Some regulators require a minimum run-off period, and many contracts require you to maintain cover for a set number of years after completion.

The sensible approach is to treat your PI limit as a decision to review, not a box to tick at renewal. If you would like a second opinion on whether your current limit matches your exposure, start a quote with Apex and we will walk through the four tests with you.

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 reading your policy wording.