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Professional Indemnity Insurance UK
Professional indemnity (PI) insurance is a form of business liability insurance that primarily protects against any real or perceived financial loss incurred by a client as a result of their business activities, such as advice given, services provided or designs produced.
PI insurance provides financial protection by covering the cost of legal defence and also any compensatory damages you're required to pay (unless compensatory damage has been excluded, such as for manufacturing professionals). It's one of many tools used to manage the people risk of a business. Here's what you need to know before you buy a policy.
- What is Professional Indemnity insurance?
- Where can I get Professional Indemnity insurance quotes?
What is Professional Indemnity Insurance?
Professional liability insurance primarily protects individuals and businesses who sell their expertise. It provides financial protection (in the form of legal defence costs and compensation payments) if any negligent acts, errors or omissions in the advice or service you provide cause an alleged financial loss or damage to a client—and they sue you for it.
What Does Professional Indemnity Insurance Cover?
Professional indemnity (PI) insurance covers the costs of a legal defence and compensation if you're found liable for a covered event or situation. It can also cover the cost of settling a matter out of court.
While exact coverage will vary from policy to policy, PI insurance can cover lawsuits arising from the following types of claims:
- Negligence or breach of duty: negligence or breach of a duty of care (e.g., giving incorrect advice, making a mistake or failing to deliver what was promised)
- Negligent misstatement: negligent misstatement or negligent misrepresentation
- Intellectual property infringement: copyright, trademark or moral rights infringement or passing-off (misleading customers that a good or service belongs to a different party)
- Breach of confidentiality: breach of confidence or misuse of information that is confidential or subject to statutory restrictions
- Defamation: slander, libel or other damage to the reputation of someone or some business
- Dishonesty: dishonesty of partners, directors, employees, sub-contractors or outsourcers contracted to you and under your supervision (however, it’s worth checking specific exclusions to see if dishonesty of directors/partners is covered, as it is often subjected to caveats or even excluded)
- Computer virus: negligence or breach of a duty of care related to computer viruses, data hacks, denial of service attack, etc. (however, the trend has been to remove this coverage from PII policies, so a separate cyber and data policy would be needed; also often 'non targeted' viruses are excluded, i.e. Any broad spam virus or something which is sent around by bots)
- Other civil liability: Policies with civil liability cover tend to cover everything except what is specifically excluded by the policy wording (i.e. cases which haven't yet been categorised will be covered); policies with no civil liability coverage will cover nothing but the specific examples listed under 'what is covered' (i.e. the case must be listed on the documentation for it to be covered)
Even if you are extremely diligent and honest, mistakes can happen. And even if you haven't done anything wrong and a claim is not justified, you'll still need to defend any liability claim made by a client or third party, which can add to up thousands of pounds.
Professional indemnity insurance (PII) can go by other names, depending on your geography or field of work:
- Professional liability insurance. More common in the US, while "professional indemnity" is more common in the UK.
- Errors and omissions insurance (E&O). Less common in the UK.
- Medical liability insurance. For medical professionals, including nurses and dentists; also referred to as "medical malpractice".
- Media liability insurance. For media professionals such as those in advertising & marketing, TV, film or theatre production, publishers and broadcasters.
PII might be the only type of liability insurance needed. It can also be a good complement to other types of general business liability coverage you might need, such as public liability (which covers third party injury or damage claims) or employers' liability insurance (which is required by law to protect against employees who are injured or fall ill due to their work).
Quick takeaway: You're likely to need professional liability insurance if errors in your professional advice or services can result in a loss to your clients (whether you’re paid or not). Professional liability insurance covers the cost of your legal defence and compensatory damages related to advice or services you provided.
Personal PI Insurance (e.g. for Sole Traders and the Self Employed)
Personal professional indemnity insurance can be purchased if your company has not supplied it for you or if you're operating as a sole trader or self employed. Beware a client stating that their insurance will cover you as a subcontractor, as it's very likely that they are covered for your errors and omissions whilst working for them, so their policy will respond when a claim comes in for your work.
However, it's equally likely that their insurance company will then take up the claim for compensation against you to recover the damages. So yes, your work is covered whilst it’s being passed off as your clients' work, but no, you are not covered—which is why it’s critical to get your own professional indemnity insurance if you’re working as a sole trader or self employed.
Professional Indemnity Examples
To give you an idea of how PI cover works and the types of situations it can cover, here are some examples of situations when professional indemnity insurance might protect a business (depending on the terms of the policy, of course):
- An architect designs a building that has to be halted midway through construction due to an error in the design. At great expense, part of the completed works have to be redone. The architect is sued for the costs and claims on their professional indemnity insurance to cover the costs. The engineers he subcontracted for calculations are then sued by the architect's PI provider to recover costs, as theirs was the initial mistake resulting in the design error.
- A financial advisor gives a client financial advise that leads to a loss. The client sues the advisor for professional negligence.
- A public relations company contracts a printing company to print posters for a company event. The posters are delivered a week late, and after the date of the event. The PR firm sues the printing company for breach of contract.
- An accountant makes a significant mistake on a company's bookkeeping records that results in a financial loss to the client.
- An interior designer recommends an expensive living room suite to a client, but the fabric did not meet the spec of "child and pet friendly" and is quickly ruined. The client sues the interior designer for the replacement cost of the furniture.
- A management consultant is hired by a food distributor to improve profitability. The food distributor implements the management consultant's plan, but a year later the food distributor's profit margin is significantly lower and they sue the management consultant.
- A garden designer is hired to plan an elaborate and expensive garden. Within a year of the garden being built, most of the plants are dead. The garden owner alleges the plants were not suitable for the soil and sun aspect.
Why is Professional Indemnity Cover so Important?
PI insurance is critical because litigation is becoming more common, legal costs are expensive and compensation awards can be BIG (tens of thousands, hundreds of thousands, even millions of pounds). Without PI cover in place, you/your business could be at risk. Not to mention that your clients could be exposed if you do make a mistake.
Who Needs Professional Indemnity Insurance?
Generally speaking, a person or business that provides professional advice, knowledge, skills or services needs professional indemnity insurance, also known as professional liability insurance, as part of their business insurance package. It will protect against legal defence costs and compensation payments to clients if you're taken to court for making a mistake, giving poor advice, being negligent, etc.
Some professional bodies and regulators legally require members to hold professional indemnity insurance due to the inherent risks of a certain profession. For example:
Professions that probably need professional liability insurance
- Accountants: see The Institute of Chartered Accountants in England and Wales
- Architects: see the Architects Registration Board
- Financial Advisors: see Financial Conduct Authority
- Healthcare professionals: see NHS Employers; note, you may see this referred to as medical malpractice or medical liability insurance
- Insurance brokers: see Financial Conduct Authority
- Solicitors: see Solicitors Regulation Authority
- Surveyors: see RICS
- Engineers: check with The Institute of Acoustics (IOA), The Institution of Engineering and Technology (IET), The Institution of Civil Engineers (ICE), The Institution of Mechanical Engineers (IME), The Institute of Structural Engineers (ISE), Society of Automotive Engineers (SAE), NICEIC, The Chartered Institution of Building Services Engineers (CIBSE), Electrical Contractors Association (ECA), the Association for Consultancy and Engineering (ACE), and the Engineering Council, as appropriate
Examples of additional professions that should consider professional liability insurance
- Advertising agencies
- Business analysts
- Charities and associations
- Construction managers
- Construction professionals
- Consulting engineers
- Digital agencies
- Educational establishments
- Event promoter
- IT professionals
- Management consultant
- Marketing companies
- Media companies
- Mortgage intermediaries
- PR agencies and designers
- Professional consultants
- Recruitment agents
- Security consultants (may be required by HSE)
- Software developers
- Writers for trade journals or magazines
What is Not Covered by Professional Indemnity Insurance?
General professional Indemnity insurance typically does not cover defective workmanship or any defective materials, deliberate acts or omissions, criminal acts, bodily injury (except in the case of medical malpractice or due to professional negligence), property damage, employment claims or personal and advertising injury.
Bodily injury and property damage are difficult ones and should be considered on a per policy basis because in construction, for example, a liability loss can then be translated into a negligence claim against someone else, where the proximate cause is bodily injury/property damage (BI/PD). For example, a health and safety consultant would find a policy excluding BI/PD to be almost useless to them and it's in nuances like this that the varying premiums you see for PI appear.
In some cases, compensatory damage is excluded. 'Consequential loss' is often excluded from policies for manufacturing professionals, and others whose work could cause a large knock on effect. So if you advise someone on their production line and the line breaks, you are not covered for the lost product which that line would have produced in the time it takes to get the line up and running again.
Average Professional Indemnity Insurance Cost UK
While the average cost of professional indemnity insurance for small businesses in the UK starts from as little as £45 to £1,500 a year, prices can reach into the tens of thousands of pounds for even a mid-size company—for instance an architect with £1M in turnover. Prices depend mostly on the type of work you do and your turnover each year (and the size of your largest contract each year).
In our guide to PII costs, we discuss how other factors like your attitude to risk and the processes you have in place to prevent losses also factor in, as well as your experience and the nature of your services within your line of work. Soft qualities like being rude can even affect your cost of professional indemnity insurance.
Professions like architects can pay a lot more because a mistake can have significant financial repercussions. For example, an architect's mistake could mean that a building has to be partially demolished and then rebuilt—at great expense. And if your activities are deemed "riskier" (say you are a management consultant involved in accountancy or tax advice, investments or financial services, M&A, insolvencies, liquidations, receiverships or turnaround management) then you'll not only pay a higher premium, but you could have a harder time finding cover.
All that said, let's get an idea of starting costs for PII. Below we have some sample quotes for a test business to show how prices vary across industries. These are sample quotes only; you may need to pay less, or a lot more.
|Sample Professional Indemnity Costs (£2,000,000 of cover)||Average Premium|
|Independent Financial Advisor||£47|
These quotes reflect the average of the 3 cheapest premiums we found online. Sometimes, it's not possible to find quotes online, however. For example, we ran some test cases with Hiscox and found they'd provide quotes online for an accountant that performs audit work, general accountancy, payroll and personal tax consultancy—but they wouldn't offer an online quote for an accountant performing secretarial work or share registrations. This is just one example, but it shows how underwriters can be less keen to cover 'riskier' work, especially when people try to buy online.
Factors Affecting PII Premiums
Professional Indemnity insurance is priced based on the specific risks of your business. Your business structure can even make a difference—for example, liability insurance for a limited company can cost more than if you're self employed.
When quoting a Professional Indemnity insurance product, an underwriter will take into account many factors, including:
- Level of cover
- Your experience
- Size of your business (annual turnover, as well as the size of your largest contracts)
- Specific work you do
- Internal signoff and review practices
- Jurisdiction of contract
- Business structure (e.g., sole trader, partnership or limited liability company)
- Number of directors or partners
- Age of directors or partners
- National or international accreditations
- How nice your website is
- The reviews you have online
- Claims history
- Number of employees
- Client requirements
Businesses that face higher proven or projected risks will pay higher premiums than businesses viewed as lower risk, all else equal. For example, following the global financial crisis surveyors were heavily claimed against for their high valuations on properties resulting in losses to home owners and banks. Now anyone carrying out valuation work is likely to pay 8-30% of their turnover in insurance premiums, despite the entire sector being well aware of the risks involved and there being plenty of compensatory measures in place now. So the real risk is low but the insurance industry remembers being burned.
How Insurers Price PII Policies
Insurance underwriters perform their own internal risk calculations that can vary considerable and result in very different quotes from different insurance companies.
As part of the risk assessment, underwriters will gossip with brokers, snoop online, check LinkedIn, read reviews and go on Wikipedia, and all of these can in some way bias their final premiums. They try to get as broad and deep a view on the target business as possible when calculating premiums and there's no 'underwriting checklist' that can be written for the vast range of businesses out there—it's more of a mindset of risk, with every new piece of information ticking up or down the premium. This is one reason quotes can vary so much from one insurer to the next.
Also, quotes could have more to do with an insurer's internal risk management than with your business specifically. For example, if an insurer decides they have written too many Professional Indemnity insurance policies for contractors lately, their risk appetite for writing new contractor liability policies may be quite low. As a result that company's quotes for new contractor liability policies could be much higher than the rest of the market.
And if an insurer's loss ratio for that profession is poor, their appetite for those policies will be low, versus another profession which may have a great loss ratio getting really low quotes despite being considered high risk everywhere else on the market.
Due to these factors and more, different insurance providers can quote VERY different prices for a similar cover. For example, when we priced cover for a software developer and management consultant we found that quotes from Hiscox (a higher-end brand) were 4X to 5X more than the cheapest plans in the market. However, this could be down to hugely varying qualities of product (open, broad cover vs. very restrictive cover) or underwriting. It’s worth investigating policies that seem too cheap as you may get what you pay for.
Considering all of this, it is always worth comparing how different insurers will price Professional Indemnity cover for your business—whether you are renewing or buying your first policy for a new small business. And to look into the exclusions and restriction on a policy before signing up.
How Much PI Cover Do I Need?
Professional indemnity is usually sold with a limit of insurance between £50,000 and £5,000,000. The first question frequently asked by businesses needing professional insurance is often: 'How much PI coverage do I need?' Answering this question requires some specialist knowledge, which is why a lot of businesses use a experienced broker to help them with the process. And professional bodies often dictate the minimum PI insurance requirements for a business, so if you or your business is a member of a professional body it's critical to know what the rules are.
Minimum insurance requirements from professional bodies
Member of a professional body? They might have their own rules about minimum professional indemnity insurance limits that you'll need to follow. For example, the Financial Conduct Authority (FCA) requires insurance intermediaries to hold a minimum of €1,250,000 for a single claim and the higher of €1,850,000 and an amount equivalent to 10% of annual income (max £30 million) in aggregate. (Read about the differences between single claim and aggregate limits in our article Business Insurance Basics.)
Members of the Architects Registration Board (ARB) needs at least £250,000 of PI cover for each and every claim; ACCA requirements for accountants depend on the level of fees earned each year (the highest fee is also a factor in the calculation), but start at £50,000 and can reach £1 million or more.
Below we've assembled links to some of the larger professional bodies in the UK, with links to their professional liability insurance requirements so you can learn more about the rules that apply to your business:
|Professional body||Field||Link to information about PII requirements|
|Architects Registration Board (ARB)||Architecture||ARB professional Indemnity guidance|
|Financial Conduct Authority (FCA)||Finance||FCA Professional Indemnity guidance|
|Association of Chartered Certified Accountants (ACCA)||Accountancy||ACCA Professional Indemnity guidance|
|Chartered Institute of Management Accounts (CIMA)||Accountancy||CIMA Professional Indemnity guidance|
|The Chartered Institute of Public Finance & Accounting (CIPFA)||Accountancy||CIPFA Professional Indemnity guidance|
|Institute of Chartered Accountants in England and Wales (ICAEW)||Accountancy||ICAEW Professional Indemnity guidance|
|Institute of Chartered Accountants of Scotland (ICAS)||Accountancy||ICAS Professional Indemnity guidance|
Where can I get Professional Indemnity insurance quotes?
There are three ways to get professional indemnity insurance: comparison engines, brokers and direct insurers.
If you have very simple needs and you don't present much risk to an insurer (e.g., a sole trader consultant carrying out low-risk work) then you might be able to source a policy at a low price going direct to a company like Direct Line, AXA, Allianz, Hiscox, Markel, Aviva or Qdos. If you shop direct, it’s a good idea to call up the 3 providers offering the best quotes to discuss your activities and the cover offered. You'll immediately get a feel for how well they understand your business and how well they understand their own policies.
However, if you run a larger company or operate in a riskier field, or you just want to get a sense of costs in the wider market, you'll probably need to use a comparison site or a broker. With current market conditions, professionals might have trouble finding professional indemnity insurance. This is because, after the Grenfell tragedy, the professional indemnity insurance market has hardened. And continues to harden and get more highly priced as of 6 months ago.
You can compare professional indemnity insurance quotes here for both companies and sole traders. After filling out a short form you'll be put in touch with up to five insurance providers—this can be a combination of brokers and direct insurers. As PII is a specialist market, this is a good chance to discuss your business, ask questions and decide how much professional indemnity insurance you need. Then simply choose the cover that offers the best price and features for your business.
In many cases, while you can fill out a quote form for professional indemnity insurance online, you may need to speak with a broker or agent before you're offered a quote. This may happen if an insurance provider/underwriter feels they need additional information about you and your business before they can price coverage for you.
Can you buy PII insurance directly from an insurer, or do you need a broker?
In most cases, a professional indemnity insurance policy is arranged through a broker in the UK. As PII is a specialist product, a business can need quite a bit of guidance and support to ensure they find the right cover (from an insurance company or a Lloyd’s Syndicate) at the right price. A broker who is an expert in PII can help navigate the market.
But keep in mind that some UK brokers know very little about PI, and they can be more useful as a 'liability buffer' i.e. Someone else you can sue for negligence for failing to protect you from a claim for negligence by misrepresenting you to insurers. They are, however, another link in a chain where clarity of understanding is critical. A broker's mistake can cost you thousands in premium or tens/hundreds of thousands in claimed losses.
Choose very carefully and know that, especially in the PI sphere almost all brokers go to the same few insurers for quotes. If you flood the market by going to multiple brokers you can end up being blacklisted by insurers or even stuck with whichever broker called 'dibs' first—and it's unlikely that the fastest broker is the most accurate one, especially with professional indemnity where often several calls back and forward are required for a full understanding of the risks a business is exposed to.
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That said, you can buy professional indemnity direct from Direct Line for Business, AXA, etc. without using a broker. FYI, while Direct Line offers an online quote system, we've found that after filling in your details you won't get a quote—you still need to call in to talk to an insurance agent.
While going direct can seem convenient and result in lower fees, keep in mind that the agent works for the insurance company (e.g., Direct Line, AXA, etc.) not for you and will only price their in-house PII product; on the other hand an insurance broker (while they charge arrangement fees) should put your application out to a number of insurers to help find you a competitive price.
What to look for in a PII broker
Most businesses seeking a professional indemnity policy will work through a broker, but are all brokers the same? Absolutely not. Brokers have varying fee structures and specialise in different niche markets (e.g., accountancy, finance, design, etc.). In addition, not all brokers work with all insurers, and vice versa.
Top Tip: There are a lot of brokers in the PII market, but there is a much smaller pool of underwriters. While it can be useful to test out more than one broker, be wary of doing so because they might all be sending your details to the same set of underwriters—a situation better avoided. Before asking a broker to get quotes for you, be sure to enquire about which underwriters they'll use. This is useful to avoid overlap, and also to ensure that you get sufficient coverage of the market.
- Insurers: Which insurers does a broker usually place business with? And which insurers do they not have a relationship with? And will they notify you before sending your proposal to new insurers?
- Niche: How much business does a broker place for businesses in your field?
- Fees: What fees does a broker charge to arrange a policy for you?
- Finance: Can a broker arrange monthly payments if you need them, and if so, what it will cost?
Finally, check customer reviews on sites like Trustpilot, Reviews.co.uk and Google to see what real customers have to say. For example, customers have rated Professionalindemnity.co.uk with 4.1 stars out of 5 at Trustpilot. When checking reviews be sure to look at the one-star reviews as these indicate a 'bad' experience. Look for references about ease of contacting customer service, speed of getting insurance documents, claims experiences and renewal prices. Also check the number of reviewers. In the case of Professionalindemnity.co.uk there were only 11 customer reviews when we checked, which is a pretty small sample so less reliable.
How to Get a Discount on PI Insurance
Brokers have two 'levers' they can pull to change premiums. They can reduce their fee if they are trying to be competitive with other brokers or insurers, but they can also increase or decrease their commission with the insurer they are placing the business with.
If a broker gets some understanding of the premium you are looking at elsewhere, and they can come in a lot cheaper, it's more likely that they will mess with their fee and the commission rate to come in, say, 5% cheaper than your other quote even if they can actually get the cover for 20% cheaper. For this reason they will push and push you for a target premium. This is a catch 22 and one worth discussing because if you don't give them one they will not prioritise your quote. If you DO give them one you will be limiting your potential savings.
Professional liability, professional indemnity and errors & omissions insurance all refer to the same type of professional advice and services cover. The term "errors & omissions" is more common in the US, while "professional indemnity" is more common in the UK.
No, public liability insurance covers covers claims from third parties due to accidents (e.g., if a customer slips and falls in your business premises), while professional indemnity covers claims for errors or negligence in the advice or service you provide.
Professional indemnity is required by regulatory or some professional bodies for certain professions (e.g., healthcare, accountants, architects, engineers, surveyors, solicitors, financial advisors, insurance brokers) and is recommended for professions where you are paid for your professional advice or services (e.g., designers, construction, advertising, freelance, PR, etc.).
No, professional indemnity is not a legal requirement, however, certain professional bodies require PI insurance as a condition of membership (e.g., chartered accountants).
You need professional indemnity insurance to pay for legal defence costs and possible compensation payments if a client sues you for causing them a real or perceived financial loss (e.g., due to negligence or making a mistake).
The cost of professional indemnity insurance starts from around £80 a year in the UK, but can easily cost 10X as much or more for a small business depending on your profession and the amount of cover you need, as well as the size of your contracts. You may get a discount if you're a member of a professional association. It can be one of the more expensive business liability insurance coverages.
The amount of professional indemnity insurance you needs is dependent on four primary factors: your profession, the size of your projects, minimum limits required by any governing body you belong to and the amount of PI insurance expected by your clients. Keep in mind that there is no limit on compensation claims in the UK, so a serious case cost thousands or even millions of pounds. Consider how much of a financial impact a mistake or oversight on your part could have on your clients—that, plus legal fees, is essentially what you need cover for.
If you give advice then you need professional indemnity insurance, regardless of whether you're working at home or in an office.
Professional indemnity insurance is available to cover professionals who give advice, whether you're part of a company or working as self employed. If you give advice then you can get PI insurance. If you're having trouble finding a policy, call a specialist business insurance broker to find out why.
Professional indemnity does not cover personal injury (that would be covered by public liability or employers' liability), most penalties & fines, or financial losses from excluded events like terrorism, war or pollution. Some penalties can be covered such as the cost of ombudsman claims before any final deliberation is made, i.e. The cost of processing any regulatory claims or complaints.
A sole trader who gives advice needs professional indemnity insurance to protect against negligence claims.
You can get quotes for both public liability and professional indemnity using this quote form. It's powered by our partner, 4.8-star QuoteZone.
Limit of Indemnity
The limit on a professional liability policy can be structured as an 'any one claim' or 'aggregate' basis, or both:
- Any one claim basis: Each individual claim has its own limit of indemnity. However, in a situation where there are multiple claims with the same cause, they're treated as a single claim.
- Aggregate basis: The limit of indemnity applies to all claims made against you during the period of cover.
Confusingly, some policies will state 'Any one claim and in the aggregate' across the top. This is just a confusing way of stating that either the cover basis is listed elsewhere (such as the certificate) OR that the policy is in fact an aggregate policy masquerading as something more. Again, written confirmation is gold plated.
Businesses that are members of a professional body (e.g., architects, insurance brokers, accounts, etc.) may have to meet certain minimum PI insurance requirements (more on that below).
Professional indemnity insurance is typically sold on a claims-made basis, which means your policy will only cover you for claims made while your insurance policy is still active, not after. This is important because a client might not discover an error you made until years after you worked for them.
If you cancel your policy or let it expire, it won't cover you anymore—even if the incident in question occurred while your policy was active. For example, if you had professional indemnity insurance but you let it expire at the end of 2019, then you're not covered for a claim in 2020 related to advice you gave a client in 2019 (even though when you gave the advice your policy was in force).
However you will be covered for any work carried out in the years prior if the claim comes in during the policy period unless insurers place a 'retroactive date' on the policy to limit these claims from prior work. This is crucial for well established businesses as they can think they are getting a much cheaper policy when in fact it excludes perhaps a decade of prior work, any of which may still generate claims!
Anyone with PI cover who is changing professions or retiring should consider buying a "run-off" professional liability policy. This protects you against new claims that are made after your professional indemnity insurance expires or has been cancelled. According to information from Lexis Nexis, new professional negligence claims can be made up to six years after the damage, so your run-off policy should cover you for at least 6 years.
However, while 6 years is a common run off period it's becoming more common for 12 years to be stated on contracts being issued now. This is due to many contracts being issued as deeds which don't have the same statute of limitations on them as your basic 'simple contracts' and it's something anyone getting involved in construction should be made aware of. 'Collateral warranties' are another rabbit hole and something worth writing about for construction professionals.
A retroactive date on a professional indemnity policy is the date from which you have held uninterrupted professional indemnity insurance cover—even if a part of the time the cover was with a different insurer. Many professional indemnity policies will include a 'retroactive' date. The retroactive date will be earlier than the policy start date unless this is a business's first year in operation and with cover.
Since professional indemnity insurance is sold on a 'claims-made' basis and you need cover when the damage occurred and when the claim is made, the 'retroactive date' feature allows you to switch insurers without creating a gap in your cover.
For example, if you are insured by company X from January 2017 until December 2019, at which point you switch to a new insurer Y, then the retroactive date on your new policy with insurer Y is January 2017. In this example you're covered by your insurer Y for any acts that occurred since January 2017, but not before.
If you've had uninterrupted cover then your retroactive date will be earlier than your policy start date.