How much PI insurance cover do I need as a startup or new firm in the UK?

~3 min read

Reviewed by Matthew Bartlett, Director · Last reviewed 2026-07-08

Startup professional-services firms face a specific PI sizing question: no claims history, uncertain scale, and often an urgent need for cover because a client contract requires it before day one. The regulator's compulsory minimums apply from the first day of practice — there is no grace period for new firms. This entry sets out the compulsory floor for each of the nine professions Apex serves, the sensible sizing above the floor for a new firm, and how to plan for growth.

Short answer — the compulsory floor by profession

Solicitors (SRA): £2m for sole practitioners/partnerships, £3m for LLPs and incorporated practices, from day one.
Accountants (ICAEW): greater of £1.5m or 2.5× fees, but the £1.5m floor applies from day one before you have fees to calculate against.
Architects (ARB): "adequate and appropriate" — no fixed floor, but effective market floor for a sole practitioner is £250k–£500k.
Surveyors (RICS): the smallest turnover band on the RICS scale applies from day one — typically £250k–£500k.
IFAs (FCA): FCA MIPRU minimums scaled to firm size. Practical starting point £1m primary each and every.
Consulting engineers: no compulsory floor; effective market floor tied to client contract requirements.
IT / management consultants: no compulsory floor; client contracts drive the number.

The client-contract driver

For most startup firms, the client contract requirement rather than the regulator floor is the operative minimum. A newly-formed accountancy practice with no clients technically needs the £1.5m ICAEW floor — but the moment a large corporate client is signed, the contract may specify £5m as a vendor-onboarding condition. Sizing needs to satisfy the highest of the current-book contract requirements, not just the day-one minimum.

Common startup sizing mistakes

Two patterns recur.

Under-sizing. "We'll upgrade when we get bigger" is the classic error. Where a first serious claim arises early — as it can, particularly on advisory work — the low limit becomes the ceiling on the firm's response. £250k of cover against a £600k claim leaves £350k of exposure sitting on the partners.

Over-sizing. Some startups buy £5m cover on day one because they read that "professionals need £5m." For a two-person consultancy generating £120k of first-year fees on £25k engagements, £5m primary is disproportionate — and typically prices materially higher than a right-sized £1m–£2m tower with proper wording.

Planning for growth

Cover can be increased mid-term via endorsement or at renewal. A startup's PII should be sized to the first-year expected profile with an explicit plan to review as the business scales. Key triggers for a mid-term sizing review: signing a client contract that specifies higher cover, taking on a materially larger engagement, adding a partner, expanding into a new work type (contract admin, DB transfers, high-rise residential).

New-firm underwriting considerations

Insurers underwriting new firms look for four things. First, the principals' individual credentials and prior experience. Second, the business plan and expected client mix. Third, the contract terms the firm operates under (standard MSA, limitation of liability, defence-costs treatment). Fourth, evidence of process — a documented client-engagement workflow, a scoping template, a change-control process. Firms that can present these get better terms than firms that cannot.

Worked example

Illustrative only. A three-partner accountancy startup founded July 2026. Two partners ICAEW members with 15+ years' Big Four experience, one ACCA member. Initial client target: 50 SME clients in year one, expected fee income £180k. First-year budget: no audit work, mixed tax compliance and advisory. Broker recommendation: £1.5m primary layer (ICAEW compulsory floor), £2m aggregate, standard wording. Explicit renewal review scheduled to reassess as the fee base scales into year two. Startup receives modest new-business rate reflecting the principals' background.

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