How to get quotes for professional indemnity insurance

To get accurate quotes for Professional Indemnity (PI) insurance, you must provide brokers with a clear breakdown of your services, your projected annual turnover, and your professional experience to ensure your policy covers the specific risks of your industry.

What is Professional Indemnity insurance?

Often referred to as "PI insurance," this cover is designed for businesses that provide advice, designs, or professional services. If a client claims that your work was negligent, contained errors, or caused them a financial loss, PI insurance covers your legal defence costs and any compensation payments you are required to pay. In the UK, many professional bodies and regulators make having this insurance a mandatory requirement before you can trade.

How to prepare for your quotes

Before contacting a broker or using an online comparison tool, gather the following information to ensure the quotes you receive are accurate and valid:

• Detailed Service Description: Exactly what advice or services will you be offering? Be specific, as "consulting" is often too broad for an underwriter.
• Projected Turnover: Insurers calculate premiums based on the size of your business. Estimate your gross fee income for the next 12 months.
• Qualifications and Experience: Your CV matters. Insurers want to see that you are qualified to provide the services you are selling.
• Limit of Indemnity: This is the maximum amount the insurer will pay out. Common levels are £250,000, £1 million, or £5 million. Check if your clients or professional bodies require a specific minimum.

The quoting process

1. Consult a specialist broker: While general business insurance can sometimes be bought via comparison sites, professional services (especially in finance or legal sectors) often benefit from a specialist broker. They understand the nuances of your niche and can negotiate better terms.
2. Complete a proposal form: Most insurers will require a "Statement of Fact" or a proposal form. Ensure every answer is honest; "non-disclosure" of a risk can lead to a claim being rejected later.
3. Compare "Any One Claim" vs "In the Aggregate": Check if your quote covers you for the full limit for every claim made in a year (Any One Claim) or if that limit is the total amount they will pay for all claims combined (Aggregate).
4. Check the "Excess": This is the amount you pay toward any claim. A higher excess usually lowers your premium, but ensure it is an amount your business can actually afford to pay at short notice.

Top Tip: Look for "Retroactive Cover." If you have been working as a freelancer or consultant before taking out the policy, retroactive cover ensures you are protected for work completed in the past, not just work done after the policy start date.

Reviewing the small print

When you receive your quotes, don't just look at the price. Read the "Exclusions" section carefully. For example, some PI policies might exclude claims resulting from work done for clients based in the USA or Canada. If you plan to work with international clients, ensure your policy isn't restricted to "UK jurisdiction" only.

Once you have a quote you are happy with, ensure the cost is factored into your cash flow forecast, as PI premiums are often a significant annual or monthly overhead for new professional businesses.