How to Choose the Right PI Insurance Policy: 7 Things to Check Before You Buy

Not all professional indemnity policies are the same. The cheapest option isn’t always the best one — and the difference in the wording can matter enormously when a claim arises.

Here are seven things every professional should check before buying or renewing their PI insurance.

Is the policy wording broad enough for your work?

Policy wordings vary significantly between insurers. Some are narrow and heavily caveated. Others offer broader coverage that better reflects the reality of professional work.

Look out for:

• How “professional services” is defined — does it cover everything you actually do?
• Whether the policy covers both negligence and breach of contract
• Any exclusions that could catch you out — particularly around specific activities, sectors or contract types

A broker who knows the PI market will spot gaps in a policy wording that you might miss entirely.

1. Is the level of cover right for your business?

The right level of indemnity isn’t one-size-fits-all. Think about:

• The size and value of the contracts you hold
• What your professional body or regulator requires
• Whether any of your clients contractually require a minimum level of cover
• The realistic cost of defending a claim, even one that’s ultimately unsuccessful

2. What is the insurer’s financial strength?

An insurance policy is only as reliable as the insurer standing behind it. If your insurer becomes insolvent, your cover disappears with it.

Always check:

• Whether your insurer holds an ‘A’ rating or above from an independent ratings agency
• Whether your broker has access to the full market — not just a limited panel of insurers
• Whether the insurer has a strong track record of paying claims in the PI sector

This is one area where working with a specialist broker pays dividends. Not all brokers have access to the same capacity providers.

3. Does the policy cover you on a claims made basis — and do you understand what that means?

Does the policy cover you on a claims made basis — and do you understand what that means?

Before you buy or switch insurer, check:

• Whether your new policy includes retroactive cover for past work
• What happens to cover if you stop trading — do you need run-off cover?
• Whether there are any gaps between your old and new policy periods

Switching insurer without understanding these mechanics can leave you exposed without realising it.

4. How does the insurer handle claims?

A policy that looks good on paper can still let you down at claim stage. Before committing, consider:

• Does the insurer have a strong reputation for handling PI claims fairly and efficiently?
• Will your broker advocate for you if the insurer disputes coverage?
• How quickly does the insurer typically respond to notifications?

Ask your broker about the claims performance of the insurers they’re recommending. A good broker will tell you honestly which insurers are easy to work with and which aren’t.

5. Are there any significant exclusions or conditions?

Every policy has exclusions. The question is whether any of them apply to your work. Common ones to watch for include:

• Exclusions for specific contract types — such as fixed-price contracts or fitness for purpose warranties
• Conditions requiring you to notify claims within tight timeframes
• Exclusions for work carried out before a certain date
• Limitations on cover for certain project types or client sectors

Read the exclusions carefully — or get a broker who will read them for you and flag anything relevant.

6. Are you buying through an independent broker or going direct?

Buying direct from an insurer might feel simpler, but it limits your options significantly. An independent broker:

• Searches the whole market rather than offering a single insurer’s products
• Negotiates on your behalf, often securing better terms than you’d get alone
• Reviews policy wordings in detail and compares like for like
• Supports you through the claims process rather than leaving you to deal with the insurer directly

For a relatively small difference in cost — sometimes no difference at all — using an independent broker gives you access to better cover, better advice, and a professional in your corner if things go wrong.

A quick checklist before you buy

Before signing anything, make sure you can answer yes to all of the following:

• The policy covers all of the professional services I provide
• The level of indemnity meets my contractual and regulatory requirements
• The insurer holds an ‘A’ rating or above
• I understand how the claims made basis works and have retroactive cover in place
• I’ve checked the exclusions and none of them apply to my work
• I’m buying through an independent broker who has searched the full market