Professional Indemnity Calculator
PI insurance level recommendation.
Calculate professional indemnity insurance cover from fee income, largest contract, and claims history to project annual premium cost.
What this tool does
This calculator estimates a professional indemnity cover level based on three core business metrics: your annual fee income, your largest single contract value, and your prior claims history. The result shows both a suggested cover amount and an estimated premium at typical market rates. Cover scales upward with higher fee income or contract values, and adjusts further if prior claims are present. The calculation models a common industry approach to sizing coverage—it does not account for sector-specific regulations, client requirements, contract terms, or individual risk factors that insurers may assess differently. The premium estimate reflects average rates only; actual quotes will vary by provider, location, underwriting assessment, and policy terms. This tool is for educational illustration of how these inputs relate to cover sizing, not a substitute for a formal insurance quote or professional advice.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Professional indemnity (PI) insurance protects against claims of negligence in professional services. Architects, engineers, consultants, accountants, IT service providers all carry PI. Recommended cover: 3x annual fee income or 5x largest contract, whichever higher. Claims history adjustment: prior claims typically push recommended cover 50% higher.
200,000 annual fee income × 3 = 600,000. 150,000 largest contract × 5 = 750,000. Pick higher: 750,000. If claims history exists, multiply by 1.5 = 1.125M. Typical PI premium: 0.5-2% of cover amount. 750k cover might cost 3-7k/year for established consultant.
PI is often mandated by professional bodies or client contracts. Architects: ARB mandates minimum 250k. Accountants: ICAEW requires 100k+. IT consulting contracts typically require 2-5M cover. Check professional body requirements and common client contract requirements before selecting cover level.
A worked example
Try the defaults: annual fee income of 200,000, largest single contract of 150,000, prior claims of 0. The tool returns 750,000.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Annual Fee Income, Largest Single Contract, and Prior Claims (count). Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
The formula behind this
Cover = max(3 × fee income, 5 × largest contract) × (1.5 if claims history else 1). Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
Using this as a check-in
Re-run this every three months. A single reading tells you where you stand; four readings tell you whether things are improving. The trend matters more than any individual snapshot.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
Max(3× ££200,000, 5× ££150,000) × claims adj = 750,000.00.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes recommended cover by taking the greater of two benchmarks: three times annual fee income or five times the largest single contract value. This base figure is then adjusted by a multiplier that reflects claims history. Where prior claims exist, the multiplier is set to 1.5; otherwise it remains 1.0. The model assumes fee income and contract values remain relatively stable year-on-year, and treats claims history as a binary indicator rather than weighting individual claim severity or recency. This calculation does not account for industry sector variations, geographic risk factors, regulatory minimum requirements, or future changes in business scope. The output represents a simplified benchmark rather than a customised underwriting assessment.
References
Frequently Asked Questions
Who needs PI?
How much does PI cost?
Run-off cover?
Claims-made nature of PI?
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