Professional indemnity insurance for public sector contracts

If you sell advice, design or other professional services, you may be asked for professional indemnity insurance for public sector contracts (PI cover). The buyer sets the amount, in the tender documents or the notice. And under the Procurement Act 2023 it cannot require insurance for performing the contract to be in place before award (s.22(3)(b)), so a PI figure above your current cover doesn’t automatically rule you out.

When public buyers ask for PI

Buyers can ask for PI, particularly where your advice or design could cause a loss. For scale, in the week to 10 Oct 2026 there were 52 live notices in business services (CPV 79), 40 in architecture and engineering (CPV 71) and 30 in IT services (CPV 72) (as of 10 Oct 2026; all live notices in those sectors, not notices asking for PI). See the live lists for business services, architecture and engineering and IT services.

Buyers set PI as a condition of participation, which must be a proportionate means of ensuring you have the capacity to perform the contract, judged against the contract’s nature, complexity and cost (s.22(1) and (5)).

In the week to 10 Oct 2026, 29 of 470 live notices (about 6%) stated insurance requirements in the notice itself (as of 10 Oct 2026; how we count). For other notices, any insurance requirement will be in the tender documents, if there is one.

How much PI cover?

There’s no standard level. It varies with the contract’s value and the harm a mistake could cause, and with the buyer’s own policy. The gov.uk guidance (para 19, below) encourages buyers to consider first whether the level of insurance they want is actually necessary, which gives you grounds to ask.

We haven’t published counts of PI levels stated in notices, so we won’t quote a “typical” figure. When we can, it will appear here with a date. Until then, check the basis of cover the tender asks for: the amount, whether it applies per claim or in total, and how long the buyer expects it to run.

Do you need it before you bid?

Not in place, no. The Act says a buyer may not require insurance relating to the performance of the contract to be in place before the award (s.22(3)(b)).

The gov.uk guidance (paras 18-19) says what a buyer can do instead. It can make it a condition that you will hold the required cover when the contract starts, and ask for evidence. That evidence can be a certificate showing existing cover, or a letter from an insurer confirming it would provide the cover together with your commitment to take it out. If you rely on the letter, the buyer must verify the cover is in place before it awards the contract.

So you still need a plan for the cover, just not a policy bought on spec.

If your PI cover is too low

Get an insurer’s letter. Ask your broker for a letter confirming they would provide the required level on award, and give yourself time for it.

Ask a clarification question. If the level looks out of proportion to the work, ask the buyer why through the tender portal. Proportionality is a legal test under s.22(5).

Use a partner. A supplier is treated as meeting a condition to the extent an associated supplier does. Suppliers are associated if they tender together, or if the buyer is satisfied one will subcontract to the other or guarantee the other’s performance (s.22(8)-(9)). A consortium partner or a subcontractor with larger cover may close the gap, if the pack allows evidence this way.

Price the premium. Get a quote for the higher level before you finalise your price, so the cost is in the bid.

What to have ready

Before you start a bid that asks for PI, get these to hand. They’re the questions a broker or buyer is likely to ask:

• your current policy schedule: the limit, the renewal date and the insurer;
• whether the limit applies per claim or in total across the policy year;
• any exclusions or conditions that relate to the kind of work the tender covers;
• the contract’s likely start date, so your broker can say what cover will be in force then.

If your policy renews between the bid deadline and the contract start, tell your broker. The cover you hold on the day you submit isn’t necessarily the cover you’ll hold when the contract starts, and the buyer is asking about the second one.

If you work in IT, architecture or consultancy, the same list applies. The amounts and wording will differ, but the checks are identical.

Questions to put to the tender pack

Read the PI clause with these in mind, and ask the buyer about anything that isn’t clear:

• Is the stated amount per claim, or in total for the policy year?
• Must the cover be in place from contract start, or only by a later date?
• How long after the contract ends does the buyer expect the cover to stay in force?
• Does the buyer expect your subcontractors to hold their own PI cover, or will your policy do?
• What evidence will it accept at bid stage: a certificate, or an insurer’s letter and your commitment?

You’re not challenging the buyer by asking. You’re making sure the quote you get from your broker is for the cover the buyer actually wants. A quote for the wrong basis of cover wastes everyone’s time.

Scotland and older procurements

Devolved Scottish authorities are outside the Act (s.2(5)(a)). They procure under the Public Contracts (Scotland) Regulations 2015, where reg 59(8)(c) lets a buyer ask for an appropriate level of professional risk indemnity insurance. The Act’s “not before award” rule doesn’t apply there, so read the Scottish notice and pack closely. Our Scotland page lists live Scottish tenders.

In England, Wales and Northern Ireland, the same wording sat in the old rules (formerly Public Contracts Regulations 2015, reg 58(8)(c), revoked 24 February 2025). Procurements commenced before 24 February 2025 (PPN 014, para 8) fall outside the Act and can still run under the old rules.

PI, public liability and employers’ liability

These are three different policies, and a tender may ask for any or all of them.

• Public liability: our page explains the “not before award” rule in more detail.
• Employers’ liability: the cover the law requires of employers in Great Britain, so a buyer may ask for it at bid stage.
• Professional indemnity (this page): for advice and design work.

Financial tests are separate again; see turnover and financial standing.

Our tender eligibility checker is coming soon. Until then, tell us your trade and postcode to join the free weekly list of live tenders, starting soon.