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Average Cost of Professional Indemnity Insurance
Professional indemnity insurance can be one of the largest business insurance costs that a company will incur. In 2026, professionals across the board can be quite surprised at the difficulty in finding cheap PI insurance quotes, so here's some consolidated information on professional indemnity costs to help you spot a good deal when you find one.
To find out the cost of professional indemnity insurance for YOU, click here.
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Average Cost of Professional Indemnity Insurance
NimbleFins analysis shows the cost of UK professional indemnity (PI) insurance starts from around £130 a year for a basic policy but can range up to thousands of pounds a year, depending on your industry, level of cover, and the specific risks you undertake.
When pricing a PI policy, underwriters look closely at the level of cover you need. The higher your limits, the more expensive your business insurance. However, additional coverage tends to get much cheaper per £1 of cover as the limit rises. For example, bumping your coverage from £100,000 to £2,000,000 does not multiply your premium by 20. In our 2026 study, a £2M policy cost roughly 6X as much as a £100,000 policy—meaning you get 20X the financial protection for just 6X the price.
| Average Professional Indemnity Costs, by cover level | Premium (Claims Made, £1k Excess) |
|---|---|
| £100,000 | £130 |
| £500,000 | £350 |
| £1,000,000 | £470 |
| £2,000,000 | £760 |
(Note, these prices represent quotes for sample businesses—quotes for your business will certainly vary from these.)
What else determines the cost of your premium?
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. Let's see what factors affect the price of PI insurance.
Professional indemnity quotes vary widely from business to business, because insurance companies price according to the perceived risk presented by each individual business. All else equal, businesses that are 'riskier' will pay higher premiums than businesses viewed as lower risk. Professions like architects can pay a lot more than, 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.
Here are some of the factors taken into account by underwriters when determining your professional indemnity costs:
Level of cover. Higher limits of insurance are typically subject to a higher insurance rate. So the more cover you need, the higher your premium. That said, additional coverage tends to get cheaper. For example, the first £100,000 of cover is usually cheaper than the next £100,000 of protection, and so on. (As shown in the table above.)
Size of your business. Insurers want to know your annual turnover, as well as the size of your largest contracts. This information is critical to determining your PI premium because turnover and contract size indicates how much risk the insurer is taking on.
Line of work. Some industries are more prone to expensive professional errors than others. For example, architects are known for paying higher PI rates because a mistake on a large building project can cost thousands or millions of pounds to put right.
Location. Where you operate can also play a part in your premiums, although to a lesser degree than with car insurance quotes, or home insurance. The legal basis of your contracts is particularly important, as if you are sued in another jurisdiction the insurer will have to pay for experts in, say, U.S. law to defend you. This will cost much more.
Business structure. Even your business structure can affect your business insurance premiums. We've noticed that sole traders tend to pay the least, while limited liability companies with more than one director tend to pay the most.
Claims history. Businesses that have made a claim in the past few years are more likely to pay a higher rate than a business with no claims in their history.
Number of employees. Businesses with more employees typically pay more for PI insurance; the reasoning there is that more people can be harder to manage, making mistakes more likely in a larger business.
In addition, neatness and transparency count for a lot in completing forms. Make sure to fill them out as comprehensively as possible. Don't be afraid to call the insurer to ask for more information as they will count this in your favour. Remember that this insurance is to protect you for making errors, so making errors on the form you send to the insurance company is a bad look. Being open and honest will also get you points—hiding business activities will only bite you later on at claims stage.
What to do if quotes are too expensive for your line of work
If you're in an industry like construction or surveying that is proving problematic for getting affordable PII quotes, you have a few options:
- Ask for a sub-limit: If an insurer refuses to cover a specific activity (like cladding), ask if they can cover it for a sub-limit of the main policy (e.g., £250,000 of cover for that specific activity within a £2M main policy). If you do this, ensure your clients are aware of the limit.
- Limit liability in your contracts: Where possible, hire a legal advisor to draft robust terms and conditions that cap your financial liability to your clients, reducing the potential exposure outside of your PI policy.
- Exclude the activity entirely: If a specific service you offer is driving your quote through the roof, you can ask the insurer to entirely exclude that single activity from your policy. You can then push the insurer to reduce their premium given that a key element of the risk is removed.
Higher PII costs for riskier businesses
If your business activities are deemed 'riskier' (e.g., your management consultancy business is 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 may have a harder time finding cover as fewer insurers will be willing to take on the risk.
For example, we ran some test cases with a major UK business insurer 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 that underwriters may be less keen to cover 'riskier' work, at any premium.
Why is PI Insurance So Expensive for Certain Professions?
Professional indemnity insurance covers compensation for a client's financial loss due to your negligence, which can be a massive sum of money. PI premiums are inherently quite expensive to reflect these potentially devastating payouts.
Furthermore, if your business activities are deemed 'high-risk' (e.g., your management consultancy is involved in M&A, insolvencies, liquidations, or financial services), you'll not only pay a higher premium, but you may have a harder time finding an insurer willing to quote you at all. For example, an insurer might readily quote an accountant performing basic payroll and personal tax consultancy, but outright refuse to quote an accountant performing secretarial work or share registrations.
Another major factor is the ongoing cladding crisis in the UK. The problem of fire-prone claddings means that architecture, construction, or surveying firms often need to pay a small fortune to get insured in the current market—potentially tens of thousands of pounds a year—and they may still struggle to get a comprehensive policy that actually covers cladding liabilities.
Calculating risk
There are many many factors impacting risk and perceived risk, which then contribute to premium. These bits of information about your business are then fed into in-house pricing models that translate this risk into a quote.
There are two possibilities for turning risk calculations into a quote. Either your policy is totally automatically underwritten and priced up online, in which case your premium is relatively set and you may get some leeway in either direction if you call in, OR your quote will be escalated to an underwriter who will conduct a full review with you and then 'manually' produce you a policy with a bespoke price and individually selected terms and conditions.
In the second case this can mean either much cheaper or much more expensive than your initial online quote, but with a good underwriter your final policy will actually be the right one for you.
Top Tip. Insurance underwriters perform their own internal risk calculations, so you may receive very different quotes from different insurance companies for comparable cover (e.g., similar limits of insurance). This is why comparing quotes from multiple providers is so important.
Comparing cheap vs. expensive PII quotes
Regardless of the reason, insurance quotes can vary significantly from one insurance provider to the next. For example, when we priced PI 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 professional indemnity cover in the market.
It's worth comparing the substance of those quotes, however, and even asking the more expensive insurer why they are more expensive. It may be that the cheaper quote is missing some critical element, or it may be that the more expensive insurer has given you a generic price and is willing to go lower on their quote.
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.
Methodology
We gathered quotes using an online quote system for a sole trader needing £2,000,000 of professional indemnity cover and adjusted these figures in March 2026. The average figures displayed above reflect the average of the three cheapest quotes we could find. Data was gathered for a few different professions to see how PI insurance rates vary by occupation. Quotes can vary significantly by line of work, business size, location and many other factors, so your PI insurance rates might vary significantly from the figures shown here.