What Does PI Insurance Cost in the UK? Rates, Factors & Savings Tips

Key Takeaways

• Typical PI insurance cost in the UK ranges from £250per year for low‑risk freelancers to over £5,000per year for high‑risk consultancies.
• Premiums are driven by five core factors: industry risk, policy limit, claims history, turnover and deductible.
• Choosing the right broker, bundling policies and improving risk management can shave 10‑30% off your quote.
• Use the checklist below to collect the data insurers need and get an accurate estimate within minutes.
• For most small‑to‑medium businesses, a £1million limit is the sweet spot between coverage and cost.

What Is Professional Indemnity Insurance?

When you provide advice, design services or any expertise that could lead to a client loss, you need Professional Indemnity Insurance (PI Insurance). It protects you against legal fees and compensation claims if a client sues for negligence, errors or omissions. In the UK, the regulator (the Financial Conduct Authority) requires certain professions-architects, engineers, accountants, IT consultants-to hold a minimum level of cover.

How Insurers Calculate the Premium

Insurance premiums are essentially a price for risk. Underwriters assess how likely you are to file a claim and how big that claim could be. The result is a premium-the amount you pay each year (or month) for the policy. Below are the five most influential variables.

Five Core Cost Drivers

1. Industry risk rating: Professions that deal with large sums of money or safety‑critical decisions (e.g., financial advisers, civil engineers) attract higher rates than low‑risk fields like graphic design.
2. Policy limit: The maximum amount the insurer will pay per claim. A £1million limit costs more than a £250,000 limit because the insurer’s potential exposure is larger.
3. Claims history: If you’ve had a claim in the past five years, expect a surcharge of 10‑30%.
4. Annual turnover: Higher revenue usually means larger contracts and greater exposure, nudging the premium upward.
5. Deductible (excess): The amount you agree to pay out‑of‑pocket before the insurer steps in. Raising the deductible from £0 to £5,000 can shave 5‑15% off the premium.

Typical Price Ranges by Profession (2025)

Checklist: Estimate Your Own PI Insurance Premium

Before you call a broker, gather these data points. Having them ready speeds up the quote and reduces the chance of a surprise surcharge.

• Business Structure: Self‑employed, limited company, partnership?
• Annual Turnover: Most recent full‑year revenue.
• Desired Policy Limit: Common limits are £250k, £1m, £2m, £5m.
• Claims History: Any settled or open claims in the last five years?
• Industry Risk Rating: Does your professional body assign a risk score?
• Deductible Preference: Amount you’re comfortable paying per claim.
• Geographic Scope: UK‑only or international clients?
• Additional Cover: E.g., cyber‑liability, public liability, or contract-specific extensions.

Feed this checklist into an online quote tool or hand it to a qualified broker. Within minutes you’ll have a ball‑park figure.

How to Reduce Your PI Insurance Cost

Premiums aren’t set in stone. Here are proven tactics that most UK firms use to keep the price manageable.

1. Shop Around with a Broker: A good broker (e.g., broker) accesses multiple underwriters and can negotiate better terms.
2. Increase Your Deductible: Raising the excess by £5,000 typically cuts the premium by 5‑10%.
3. Bundle Policies: Combining PI with public liability or cyber cover often yields a discount of up to 15%.
4. Improve Risk Management: Implementing clear client contracts, regular staff training, and a documented claims handling process signals lower risk to insurers.
5. Maintain a Clean Claims Record: Even a single small claim can raise your rate for up to three years.
6. Consider a Higher Policy Limit Only If Needed: Many SMEs over‑insure. A £1million limit is usually sufficient for most services.
7. Review Annually: Market conditions and your business profile change, so a yearly review can capture new savings.

Frequently Asked Questions

Next Steps: Getting a Quote in Minutes

Armed with the checklist, visit a reputable broker’s website or call a local insurance adviser. Provide the data you collected, ask for a written quote, and compare at least three offers before signing. Remember, the cheapest policy isn’t always the best-check the exclusions, the claims handling reputation of the underwriter, and whether the policy aligns with your client contracts.