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How much does professional indemnity insurance cost?

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Professional indemnity insurance cost

Professional indemnity insurance cost will vary from to insurer to insurer. Each will take a view on the amount of risk you pose and allocate a price (otherwise known as a premium).

At get indemnity™ professional indemnity insurance can cost as little as £332 per year for a £1 million limit. However, we work with a number of insurers and that premium cost will change depending upon a number of factors we discuss below.

The main drivers for your professional indemnity insurance cost will be the industry you work, services you offer to your clients, the professional fees earned and exposure to increased risk factors.

How to manage your professional indemnity cost?

When you apply for professional indemnity insurance you should breakdown your business activities and turnover with as much detail as possible.

If your turnover is made of professional fees and other income, such as products sold, it is important to clearly separate because insurers should only take into consideration your professional fees when calculating your professional indemnity cost.

By offering complete answers in your business insurance application, insurers will have greater capacity to offer competitively priced premiums. Information that identifies how your business represents a better risk than your industry peers can increase the availability of cover and reduce your professional indemnity cost.

Insurers will consider professional indemnity discounts where evidence of compliance procedures, risks assessments and/or a complaints register demonstrate your risk adverse nature and high level of due diligence.

How do insurers calculate your professional indemnity insurance cost?

The size of professional fees generated will bear a direct relationship to how insurer will measure and calculate your professional indemnity cost.

The allocation of fees between different professional services and the perceived exposure attaching to each will impact your professional indemnity cost.

Experience acts as an indicator of the applicant's ability to: 1) provide accurate advice or services; 2) match advice and services to the client's needs; 3) manage client expectations; 4) recognise and mitigate client dissatisfaction.

The allocation of fees between counties and which jurisdictions you contract your customers (UK, USA, Canada, Europe, Rest of World) will impact the calculation for your professional indemnity insurance cost.

Financially stable applicants are less likely to change their business model, engage in M&A activity and downsize staff, potentially impacting their ability to service clients with whom they are contractually bound.

Reliance on any one client can lead to a situation whereby the applicant does not share the insurers interest in resisting spurious claims, therefore commercial interests are in conflict.

Excessive fees compared to contract values can indicate a higher perception of risk compared with industry standards can affect your professional indemnity cost.

Lack of standard contracts that mitigate your risk and legal vetting can indicate a reduced level of risk management and appreciation for the liabilities being accepted.

The nature and size of an applicant's typical project can indicate the level of exposure posed, with larger scale projects typically carrying increased professional indemnity insurance cost.

Frequency and severity of claims with a lack of remedial action, can indicate a lack of quality risk management and systemic issues, will signifiantly affect your professional indemnity cost.

Complete our digital on-boarding process and we can collate information that allows us to negotiate competitive professional indemnity insurance quotes from the wholesale market.

What are insurers contractual preferences when calculating your professional indemnity cost?

Contractual conditions can offer valuable protection against professional indemnity claims. Therefore, insurers may require you maintain certain contractual conditions.

Your professional indemnity cost and availability of cover can be impacted if your contracts do not maintin:

>  a description of services;
>  limitations of liability; and
>  a consequential loss exclusion.

Insurers prefer if you offer a performance standard no greater than reasonable care and skill. Preferred contracts will not include: guarantees or warranties; liquidated damages (promise to pay if a service is not performed); or assume a third party's liability.

At get indemnity™, we have the knowledge to identify which insurers have the capacity to offer your profession the most competitive terms. Complete our online application to compare professional indemnity insurance cost from the wholesale market.


PI Insurance Cost posted by Get Indemnity

This guide is for information purposes and based on sources we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.