The Professional Indemnity Insurance Buyer's Checklist
Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05
Professional indemnity insurance protects your business against claims that your advice, design or professional service caused a client a financial loss. The catch is that two PI policies with the same headline price can behave completely differently when a claim lands. What matters is the fine detail. Use the checklist below to compare policies properly rather than on premium alone.
1. Limit of indemnity — is it high enough?
The limit of indemnity is the maximum the insurer will pay. Set it too low and a single large claim can exceed your cover, leaving you to fund the shortfall personally or from the business.
Work out your minimum from three angles: any figure your regulator or professional body requires, any minimum your largest client contracts demand, and a realistic worst-case loss for the work you do. Common options are £1m, £2m and £5m, but the right number is specific to your exposure, not a default.
Also check whether the limit is “any one claim” or “in the aggregate”. An aggregate limit is the total for the whole policy year across all claims combined — two claims can exhaust it. “Any one claim” resets for each separate claim and is generally stronger. Finally, ask whether defence costs are paid in addition to the limit or eat into it, because legal costs alone can be substantial.
2. Basis of cover — claims-made, not losses-occurring
Almost all PI policies are written on a claims-made basis. That means the policy that responds is the one in force when the claim is made against you and notified — not the policy that was in force when you did the work. This is the single most misunderstood feature of PI, and it has two practical consequences.
First, you must keep PI in place continuously for as long as you could still be sued for past work — a gap in cover can leave old work unprotected. Second, you must notify the insurer of claims and circumstances promptly, within the policy period. Sit on a problem and you risk the insurer declining it. Read the notification clause and diarise your renewal date so cover never lapses.
Not sure your current PI actually fits the work you do now? We will read your wording and tell you plainly.
Get a PI quote →3. Retroactive date — does it reach back far enough?
Because PI is claims-made, the retroactive date is what connects today's policy to yesterday's work. It is the earliest date of work the policy will cover. Any professional service you carried out before the retroactive date is excluded, even if the claim arrives while your current policy is live.
Ideally the retroactive date matches the date you first started providing professional services — often described as “retroactive: unlimited” or “none”. When you switch insurers, check the new policy carries your existing retroactive date forward. If a new insurer resets it to today, years of past work suddenly fall outside cover. This is one of the easiest things to get wrong when moving policies for a cheaper premium.
4. Exclusions — read what is carved out
The insuring clause tells you what is covered; the exclusions tell you what really is not. Two policies at the same price can differ enormously here. Read the exclusions in full and check whether any of them apply to your core activity, because an exclusion that hits your main line of work makes the policy close to worthless for you.
Common areas to scrutinise:
- Activities: is every service you actually provide listed in the description of your business? Work outside it may not be covered.
- Fraud and dishonesty: often excluded — check whether innocent partners are protected against a dishonest colleague's acts.
- Contractual liability: liabilities you assumed by contract that go beyond your common-law duty may be excluded.
- Sub-contractors and outsourcing: check whether work you delegate is covered.
- Territorial and jurisdiction limits: where you can be sued and under which country's law. Work with a US or Canadian dimension is often restricted.
- Known circumstances: anything you were already aware of before inception is excluded — hence the importance of full disclosure.
5. Insurer strength — will they be there to pay?
A PI claim can surface years after the work and take a long time to settle, so the insurer's financial durability matters as much as its price. Look for insurers with a recognised financial-strength rating from an established agency, and confirm the risk is placed with a properly regulated insurer or Lloyd's syndicate.
Check who actually carries the risk. Some policies are fronted or delegated through a chain of intermediaries; you want to know the ultimate insurer and that it is authorised to operate in the UK. A broker can confirm the security behind a quote and flag anything unrated or unfamiliar before you commit.
6. Run-off — cover for when you stop
Because claims can arrive years after you finish a job, your exposure does not end when you retire, sell up or close the business. Run-off cover is a claims-made policy that continues to respond to claims about past work after you have stopped trading. Without it, a claim that lands the year after you close has nothing to respond to.
Before you buy, ask how run-off is arranged, for how many years it is typically maintained, and roughly what it costs, so there are no surprises at the point you wind the business down. It is far easier to understand this at purchase than to discover a gap when you are already retired.
The checklist at a glance
| Check | What good looks like |
|---|---|
| Limit | Meets contract/regulator minimums and worst-case; costs in addition to the limit; “any one claim” where possible. |
| Basis | Claims-made, held continuously, with prompt notification of claims and circumstances. |
| Retroactive date | Reaches back to when you started; carried forward unchanged if you switch insurer. |
| Exclusions | Your core activities listed; no carve-out that hits your main work; territory fits your clients. |
| Insurer strength | Rated, UK-authorised insurer or Lloyd's; you know who carries the risk. |
| Run-off | Available and understood before you buy, for when you close or sell. |
Working through these six points turns a confusing set of quotes into a genuine comparison. If you would rather have a broker do the reading, start a quote with Apex and we will match the wording to how you actually work.
Common questions
What is the difference between a claims-made and losses-occurring policy?
A claims-made policy responds based on when the claim is made against you, so the current year's policy handles a claim about old work. A losses-occurring policy (more common in other insurance types) responds based on when the event happened. PI is almost always claims-made, which is why continuous cover and the retroactive date matter so much.
Do I still need PI after I stop trading?
Usually, yes. Claims can arise years after the work was done, and once your live policy ends there is nothing to respond to unless you have arranged run-off cover. Ask about run-off before you buy so you know how it works when you retire or sell the business.
How much PI cover should I buy?
Take the highest of any regulatory or professional-body minimum, the level your largest client contracts require, and a realistic worst-case financial loss for your work. There is no universal figure — the right limit depends on your activities and clients, which is exactly what a broker can help you size.
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.