Professional Indemnity Insurance for New Insurance brokers — Your First Policy (2026)

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

1. Do you actually need PI as a new insurance broker?

Yes — and unlike most professions, for you it is doubly true. There are two separate reasons a new broking firm carries professional indemnity, and both apply from the day you open.

The regulatory reason. To arrange, advise on or deal in general insurance you need the right permissions from the Financial Conduct Authority. Holding those permissions comes with prudential rules — the FCA's MIPRU sourcebook — which require insurance intermediaries to hold professional indemnity cover with defined minimum limits. Those minimums flow from the Insurance Distribution Directive (IDD) requirements that were brought into UK regulation. In plain terms: an authorised intermediary that lets its PI lapse is in breach of the conditions it operates under. This is not a “nice to have” you can defer until you're busier — it sits alongside your authorisation itself.

The client-and-contract reason. Even leaving regulation aside, broking is advice-led work. You recommend cover, you place risks, you handle premiums and you interpret policy wordings for clients who rely on you to get it right. If a client suffers a loss because a policy you arranged didn't respond the way they expected — a mis-described risk, a missed disclosure, a gap in cover, an administrative slip — they will look to you to make it good. PI is the policy that responds when a client alleges your professional work caused them a financial loss. It covers the cost of defending the allegation and any damages or settlement that follows, up to your limit. For a young firm without a large balance sheet, that protection is the difference between a bad month and an existential problem.

So the honest answer for a first-time buyer is: you need PI because the regulator requires it, and you'd want it even if they didn't.

2. When cover must start — and why day one matters

The instinct of a new business owner is to keep costs down until the money starts coming in. With PI, that instinct works against you. Your exposure begins the moment you first act for a client — the first quotation you present, the first policy you place, the first piece of advice you give. It does not begin when you invoice, and it certainly doesn't begin when you feel “established.”

There is a second, subtler reason day one matters, and it's specific to how PI is written (more on this in section 5). Because the policy responds to claims made against you during the policy period, the very first policy you buy sets the clock running on something called your retroactive date — effectively, how far back your cover reaches. Start your policy on the day you start trading and your retroactive date lines up with your first client work, so there's no window of unprotected activity sitting behind you. Leave a gap of a few weeks “to save money,” and any work done in that gap can end up permanently outside your cover. That's a poor trade for a modest early saving.

The practical rule for a first-time buyer is simple: have your PI incepted before, or on, the day you take on your first client. If you're reading this while still setting up, that's exactly the right time to get a quote in principle so cover can go live the moment you're ready to trade.

3. How much cover does a new firm need?

The “limit of indemnity” is the most you can claim under the policy. For a first-time buyer, the figure is driven by three things rather than guesswork.

The regulatory minimum. As an authorised intermediary you can't go below the minimum limits set under MIPRU/IDD. These are expressed both as a limit per claim and as an aggregate limit for all claims in the year, and they scale with the size of your business. Your broker or the FCA rules will confirm the exact minimums that apply to you at the point you're authorised — treat them as your floor, not your target.

The size and nature of what you place. The minimum is a legal baseline, not a measure of your actual exposure. A firm placing high-value commercial risks, or advising clients whose potential losses run far above the regulatory floor, needs a limit that reflects the sums involved — not just the sum the rules require. Ask yourself: if a placement went wrong, what is the largest loss a client could plausibly pursue me for? Your limit should be able to absorb that, plus defence costs.

Client and network mandates. If you'll work as an appointed representative, sit within a network, or take on commercial clients or scheme business, you may find a minimum limit is written into your agreements. Corporate clients and networks frequently specify a required level of PI — commonly expressed as £1m, £2m or £5m of cover — before they'll deal with you. It's worth checking these requirements before you buy, so you size your first policy once rather than twice.

For many new firms the honest planning question is “what's the biggest single thing that could go wrong, and does my limit cover it?” The figures above (£1m, £2m, £5m) are common options to weigh, not a recommendation — the right number is the one that matches your actual book of business.

4. What a first policy costs to think about — what underwriters look at

We won't quote a price here, because a genuine premium depends on your specific circumstances. What's more useful for a first-time buyer is understanding what an underwriter is actually assessing when a firm with no trading history asks for a quote — because once you know that, the process stops feeling like a black box.

For a new insurance broker, an underwriter is essentially forming a view of your risk from a handful of inputs:

• Your estimated turnover or income. Since you have no accounts yet, you provide a reasonable forecast for your first year. This is the single biggest driver — it's a proxy for how much work you'll do and therefore how much exposure you carry.
• The activities you'll undertake. Personal lines, commercial lines, specialist or high-hazard classes, wholesale placing, scheme management — the mix matters, because some activities carry more claims potential than others.
• Your experience and qualifications. Time spent in the industry, relevant qualifications (for example Chartered Insurance Institute qualifications), and the track record of the people running the firm all reassure an underwriter that the work will be done competently.
• Your regulatory status. Whether you're directly authorised or an appointed representative, and the permissions you hold, shape the picture.
• The limit of indemnity and excess you choose.

Here's the reassuring part: as a brand-new firm you have no claims history to disclose. For an established broker, a run of past claims is often the thing that pushes a premium up. You start with a clean sheet — and a clear, well-presented account of a sensible business is exactly what an underwriter wants to see. Being precise and realistic about your turnover estimate and activities does more to earn a fair quote than any amount of optimism.

5. “Claims-made” explained simply — and why continuity matters

This is the one technical idea every first-time buyer must understand, because it changes how you should think about your policy for the rest of your career.

Professional indemnity is written on a claims-made basis. That means the policy that responds is the one in force when a claim is first made against you — not the one that was in force when you did the work. Contrast that with, say, your car insurance, which responds to the moment of the accident. With PI, what matters is that you have a live policy on the day the complaint lands.

Two consequences flow from this, and both are important on day one:

Continuity is everything. Because cover attaches at the moment of the claim, a gap in your PI can leave you exposed for all the work you did while insured, if a claim happens to surface during the uninsured gap. Letting a policy lapse and picking a new one up later is not the same as having run cover continuously. From your very first policy, treat renewing on time and without a break as a non-negotiable part of running the firm.

Your retroactive date protects your back-catalogue. A claims-made policy typically covers work going back to a “retroactive date.” For a new firm, that date should be set to when you started trading, so all your past work is picked up. Maintain unbroken cover and each renewal keeps protecting that growing history. This is also why, if you ever stop trading, you'll hear about “run-off” cover — a policy that keeps responding to claims that arrive after you've closed, for work done while you were active. You don't need to buy that now, but it's worth knowing it exists, because it's the same principle at work.

The takeaway: buy early, never let it lapse, and your first policy becomes the foundation that every future renewal builds on.

6. How to buy your first policy — what you'll need

Buying PI for the first time sounds daunting; in practice a new firm has less to gather than an established one. Here's what to have ready:

• Your firm details. Legal structure (sole trader, limited company, partnership), trading name and where you're based.
• Your regulatory position. Whether you're directly authorised or an appointed representative, and the permissions you hold or are applying for.
• An estimated first-year turnover or commission income. A considered forecast is fine — nobody expects accounts from a firm that hasn't traded yet.
• A description of your activities. The classes of business you'll place and the types of client you'll serve.
• Details of the key people. Experience and any relevant qualifications.
• The limit of indemnity you want — informed by section 3 above and any network or client mandates.

Notice what's missing from that list: years of accounts, a claims history, a long paper trail. Because you don't have those yet, the proposal for a new firm is genuinely lighter. A good broker will help you frame your turnover estimate and activities so the risk is presented clearly, and will match you to insurers who welcome start-ups rather than shy away from them. If you'd like to see how quick it can be, you can begin your proposal online and we'll take it from there.

7. Common first-timer mistakes to avoid

• Delaying cover to save money. The gap you leave behind can never be filled in retrospectively. Insure from your first client.
• Buying only the regulatory minimum without thinking. The minimum is a legal floor, not a measure of your real exposure. Size the limit to the losses your clients could actually suffer.
• Under-estimating turnover to trim the premium. An income figure that doesn't match reality can create problems if you ever need to claim. Be realistic — it's in your interest.
• Letting the policy lapse at renewal. Because PI is claims-made, a break in cover is one of the most damaging things you can do. Diarise the renewal and never miss it.
• Ignoring network or client PI requirements. Check any mandated limits before you buy so you don't have to re-broke your policy weeks later.
• Treating PI as a one-off purchase. Your cover should grow as your income and activities grow. Review it at each renewal, not once and never again.

8. About Apex — and why we can quote you quickly

Apex Insurance Brokers Limited is a Bristol-based, FCA-authorised broker (FRN 724952). We arrange professional indemnity cover for firms across the professions, and we understand the particular position of a broker buying PI for the first time — because we operate under the same rules you do. That gives us a head start in framing your risk for insurers: we know what MIPRU expects, what a network mandate looks like, and how to present a start-up so it's taken seriously.

Because a new firm's proposal is light, we can usually turn a first quote around fast. Give us a turnover estimate, a description of your activities and your regulatory status, and we'll do the legwork of matching you to insurers who are comfortable with new firms — and make sure your retroactive date and limit are set up correctly from the very first day.

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.