Professional indemnity insurance
What professional indemnity insurance covers, how claims-made policies and run-off cover work, and what limit UK firms actually need.
Professional indemnity, or PI, responds when a client says your advice, design or work caused them financial loss. For a professional services firm it is usually the cover that determines whether you can win work at all, because clients write minimum PI limits into their contracts and some regulators and professional bodies mandate it outright.
Claims-made, and why that matters more than the price
PI is almost always written on a claims-made basis. That means the policy in force when the claim is <strong>made</strong> responds — not the one in force when you did the work. Two consequences follow, and both catch firms out.
- Continuity matters enormously. A gap in cover can leave historic work unprotected even if you were insured when you did it.
- You need run-off cover if you stop trading, retire or sell the business. Claims can surface years after the work, and without run-off there is nothing to respond to them.
Check your retroactive date
Your policy will have a retroactive date, and work carried out before it is not covered. When switching insurer, make sure the new policy picks up your original retroactive date rather than starting fresh — otherwise you silently lose cover for everything you have already delivered.
What limit do you need?
Start with your client contracts, not with what feels affordable. Many commercial contracts specify a minimum PI limit before a client will engage you, and professional bodies frequently set their own floor. Beyond contractual minimums, the sensible test is the largest single loss a client could plausibly suffer from your work — which for many firms is far larger than their fee.
Who needs it
- Accountants, bookkeepers and tax advisers.
- Consultants, coaches and trainers giving advice a client acts on.
- Architects, surveyors, engineers and designers.
- IT and software firms, marketing agencies and recruiters.
- Anyone whose contracts specify a PI limit, which is increasingly most B2B service firms.
Professional indemnity insurance: frequently asked questions
What is the difference between professional indemnity and public liability?+
Public liability covers physical injury or property damage — a visitor tripping in your office. Professional indemnity covers financial loss caused by your advice or work — a client losing money because your figures were wrong. They are entirely different claims and most professional firms need both.
Do I still need PI after I stop trading?+
Yes, if you want protection for the work you already did. Because PI is claims-made, cover only responds if a policy is in force when the claim is made. Run-off cover keeps that protection alive after you cease trading, typically for six years, which reflects the usual limitation period for contract claims.
How much does professional indemnity cost?+
It varies far more than most covers, because it is priced on your discipline, your fee income and the size of contracts you work on. A sole-trader bookkeeper and a structural engineering practice are not comparable. The limit you need is usually set by your contracts, so establish that first and price against it.
Cover usually bought alongside this
How this page is produced
Written by My Energy Deals Ltd and reviewed by Arkwright Insurance Brokers Limited (FCA firm reference 434855).
mybusinessdeals is an introducer, not an insurer and not an FCA-authorised broker. This page is general information about types of cover, not a personal recommendation or advice on which policy to buy. Any policy is arranged by, and you contract directly with, our FCA-authorised partner or their panel. Premium figures are indicative market ranges, never a quote.
Last reviewed 3 September 2026.
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