Professional indemnity insurance cost UK 2026

How much does professional indemnity insurance cost?

Professional indemnity (PI) insurance for a typical UK micro-business costs £150–£250 a year for £1 million of cover, according to NimbleFins market research. At the cheapest end, insurers such as AXA advertise policies from around £6 a month (about £72 a year) for the lowest-risk sole traders, and Simply Business reports its accountant customers paid an average of roughly £88 a year and consultants about £111. At the other end, regulated professions pay far more: a small architecture practice typically pays £500–£800, and small solicitor firms £2,000–£8,000 or beyond, because their regulators impose strict minimum terms and their claims are larger.

• What it is: cover for claims that your advice, designs or services caused a client financial loss — negligence, errors and omissions, breach of duty, and the legal costs of defending yourself.
• What sets the price: your profession’s risk profile, fee income, the limit of indemnity you buy, your claims history and the size of the contracts you take on.
• Why you must compare: broker analysis shows quotes for identical cover can vary by 400% or more between insurers, so a single quote is rarely the market price.

What professional indemnity insurance actually covers

PI insurance responds when a client claims your professional work caused them financial loss. Unlike public liability (injury and property damage) or employers’ liability (a legal requirement if you employ staff), PI is about the quality and consequences of your advice and output.

• Professional negligence: mistakes, miscalculations or wrong advice that cost a client money.
• Errors and omissions: things left out of a design, report, return or specification.
• Breach of confidentiality or copyright: unintentional misuse of client information or third-party material.
• Defamation: libel or slander arising from your professional work.
• Loss of documents or data: the cost of restoring client records you were responsible for.
• Defence costs: solicitors and experts to defend a claim — often the largest part of a payout even when the claim fails.

It does not cover deliberate wrongdoing, contractual penalties you simply agreed to, or claims made after your policy has lapsed — PI works on a claims-made basis, so the policy has to be live when the claim arrives, not just when the work was done. That single feature explains both run-off cover and retroactive dates, which trip up more small firms than anything else in this market.

What drives your premium — and how to pay less

• Profession and service mix: the single biggest factor. Design responsibility, regulated advice and anything touching construction or finance costs more per pound of fee income.
• Fee income / turnover: premiums scale with revenue because bigger contracts mean bigger potential claims.
• Limit of indemnity: £1m is the common entry point; doubling to £2m typically adds far less than double the premium, because most claims settle well below the limit.
• Claims history: a clean record keeps you in the cheapest rating band; even a notified circumstance that never becomes a claim can nudge the price.
• Excess: accepting a higher voluntary excess trims the premium, as with any insurance.
• Retroactive cover: asking a new insurer to cover years of past work (an early retroactive date) costs more than cover starting today — but is usually worth it.
• How you pay: annual payment usually beats monthly instalments once interest is included.

The cheapest reliable saving is simply shopping the market: because insurers rate professions so differently, broker analysis routinely finds 400–500% variation between quotes for identical cover. Get at least three quotes, check the excess and retroactive date match, and re-compare at every renewal rather than auto-renewing.