There is no universal Professional Indemnity limit that suits every business.

The appropriate limit can be influenced by the professional services provided, potential claim severity and any contractual, registration or regulatory requirements.

What can determine the required limit? #

Factors can include:

• Client contract requirements
• Project values
• Project complexity
• Type of professional services
• Potential financial loss arising from an error
• Number and size of clients
• Government or principal contractor requirements
• Registration or licensing requirements
• Professional association requirements
• Insurer availability

A contract may require a particular Professional Indemnity limit before work can commence. That contractual minimum does not necessarily mean it is the appropriate limit for the business’s entire risk profile.

Project value can be relevant, but Professional Indemnity exposure is not necessarily limited to the value of the professional fee or contract.

Policy structure also matters #

Check whether defence costs are:

• Included within the policy limit
• Additional to the policy limit
• Subject to separate limits or conditions

This can materially affect the effective amount of protection available.

The required limit may ultimately be driven by the highest applicable contractual, regulatory or commercial requirement.

Contact our team if you would like help reviewing the insurance requirements applying to your Professional Indemnity limit.