When Do You Need to Increase Your PI Limit?

You took out professional indemnity insurance when you started your business. Maybe $1 million. Maybe $2 million. It seemed like plenty at the time.

But your business has grown. You’re targeting bigger projects. Your revenue is higher. And someone’s asked whether your PI limit is enough for the work you’re doing.

At Tank Insurance, Jack on our team regularly helps professionals increase their PI limits - particularly engineers, IT consultants, and design professionals who are pursuing larger project work. Here’s when to increase, how to do it, and what it actually costs.

When should you increase your PI limit?

There’s no single trigger, but these are the common signs that your current limit isn’t adequate:

Your revenue has grown significantly

Revenue is one of the primary factors insurers use to size PI cover. If your revenue has doubled or tripled since you set your current limit, your exposure has grown proportionally. A $1 million limit that was appropriate for a $200K-revenue consultancy may not be adequate at $800K revenue.

You’re targeting larger projects

Larger projects mean larger potential claims. If an engineering design flaw causes a $3 million remediation cost on a large commercial project, a $2 million PI limit leaves you $1 million short - plus defence costs, depending on whether your policy’s defence costs are included within or sit outside the limit of indemnity.

This is one of the most common reasons professionals come to us for a limit increase. They’re ready to take on bigger work and need the PI to match.

Your clients expect it

Enterprise clients, government agencies, and principal contractors increasingly specify minimum PI limits in their engagement terms. Based on our broking experience, common requirements include:

• Government contracts: $5-10 million
• Large commercial projects: $5-20 million
• Enterprise consulting: $5-10 million
• Financial services advisory: $2-5 million

If you’re being asked for higher limits by the clients you want to work for, it’s time to increase.

Your professional body has updated requirements

Professional bodies occasionally update their minimum PI requirements. If your body has raised the minimum since you last reviewed your cover, check whether you’re still compliant.

The cost of defending claims has increased

Even if your work hasn’t changed, the cost of defending a PI claim has. Legal fees, expert witness costs, and settlement amounts have all increased. A limit that would have covered a claim five years ago might be insufficient for the same claim today.

How much does it cost to increase?

The pricing structure may not work the way you’d expect. The cost of increasing PI limits isn’t linear - doubling your limit doesn’t double your premium.

Here’s why: the first $1 million of cover is the most expensive because it covers the most likely claims. Additional layers of cover above that are cheaper because the probability of a claim exceeding $1 million is lower than a claim occurring at all.

General cost guide:

Increase	Illustrative Range Only
$1M to $2M	30-50% increase
$2M to $5M	40-70% increase
$5M to $10M	30-50% increase
$10M to $20M	25-40% increase

These ranges are indicative only and based on our general broking experience. Actual premium impacts vary significantly depending on profession, revenue, claims history, insurer, policy structure, and market conditions. They should not be relied upon as an estimate for any individual risk.

As a hypothetical illustration: if you were paying $3,000 per year for $2 million PI, moving to $5 million might cost $4,200-$5,100. Your actual premium will differ - sometimes significantly - based on your specific circumstances.

The exact cost depends on your profession, revenue, claims history, and which insurer is most competitive at the higher limit. This is where a broker adds real value - the insurer that’s cheapest at $2 million isn’t always the cheapest at $5 million.

We covered the broader dynamics of PI pricing for engineers and PI lessons in separate guides.

How to increase your PI limit

There are two ways to do it:

At renewal

This is the simplest approach. When your PI renewal comes around, your broker quotes at multiple limit levels so you can compare the cost at $2M, $5M, and $10M side by side.

Increasing at renewal gives you the most options because all insurers are quoting fresh. Your broker can market the higher limit to the full market and find the most competitive option.

Mid-term

If you need the increase before your renewal date - because a project opportunity has come up or a client requires it - most insurers allow mid-term limit increases.

You’ll pay a pro-rata additional premium for the remaining policy period. The existing insurer doesn’t have to be your only option though - a broker can check whether another insurer offers better terms at the higher limit, even mid-term.

How to present the increase to insurers

How you frame the increase matters. How the submission is prepared - including the level of detail, supporting documentation, and risk management information - can influence the terms insurers offer.

Key points to include:

• Growth trajectory - show that the increase reflects business growth and the type of work you’re targeting
• Risk management - demonstrate quality assurance processes, peer review, project management frameworks
• Claims history - highlight a clean claims record if applicable
• Client profile - describe the types of clients and projects you’re working on
• Revenue and projections - current revenue and expected revenue supports the need for higher limits

What to avoid:

• Don’t present the increase as a one-off requirement for a specific project. Insurers want to see that the higher limit reflects your ongoing business direction, not a single engagement
• Don’t understate your revenue or services to try to reduce the premium. If a claim arises from undisclosed services, the insurer may deny coverage

A broker prepares this submission for you. Jack regularly helps professionals move from $1-2 million to $5-10 million by presenting the risk in a way that specialist underwriters respond to positively.

For harder-to-place PI increases, particularly in engineering and design disciplines, see our guide on hard-to-place PI.

What about retroactive cover when increasing?

When you increase your PI limit, make sure the retroactive date on the new limit matches your existing policy. If you’ve had PI for 10 years at $2 million and you increase to $5 million, the additional $3 million layer should also cover past work - not just future work.

This is a detail a broker manages for you, but it’s worth understanding. We covered retroactive dates in our retroactive date guide.

Frequently Asked Questions

How much does it cost to increase a PI limit?

Less than most people expect. Moving from $1M to $2M typically adds 30-50% to the premium. $2M to $5M adds 40-70%. The exact cost depends on profession, revenue, and claims history.

Can I increase my PI limit mid-term?

Yes. Most insurers allow mid-term increases with a pro-rata additional premium. A broker can also check whether another insurer offers better terms at the higher limit.

What triggers the need to increase PI cover?

Common triggers: pursuing larger projects, revenue growth, client expectations, professional body requirement changes, and rising defence costs. If the potential financial impact of your work has grown, your limit should grow with it.

Ready to increase your PI limit?

If you’re looking at larger projects, growing your client base, or simply want to make sure your PI limit matches your current exposure, we can help. Tank Insurance places PI across engineering, IT, consulting, and professional services - including specialist limit increases through underwriters who understand your discipline.

Call us on 02 9000 1155 or email [email protected].

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This is general information only and does not take into account your objectives, financial situation, or needs. You should consider whether the information is appropriate for you and read the relevant Product Disclosure Statement (PDS) before making any decisions about insurance products.