The level of professional indemnity you need comes from three places and they should be consulted in order. A regulator's floor where one applies, the client contract where one exists, and your own view of what a client could lose. The highest of the three is the answer.
The regulator's floor
Regulated professions have minimums, sometimes a fixed figure and sometimes a calculation from fee income. The requirement applies across all your work rather than to one engagement, and it is reviewed periodically, so last year's figure is not automatically this year's.
The client contract
Corporate engagements, public sector frameworks and recruitment agency terms each state a minimum. It is set by the client's risk policy rather than by an assessment of you, which is why it can look disproportionate. It is still a minimum rather than a recommendation.
What a client could lose
Size it against the consequence of the work being wrong rather than against the fee. A short engagement can produce a large decision. This is the only one of the three that is judgement, and it is usually the one that argues for buying above the contract figure.
Then check two details
Whether defence costs sit inside or outside the limit, because inside means every pound spent defending reduces what is left to settle. And whether the limit is per claim or in the aggregate for the year, because an aggregate can be exhausted by one claim.
Questions people ask about what level of professional indemnity insurance do i need
Should I just buy the contract minimum?
It is a floor set by the client's risk policy. Many businesses sensibly buy above it, because the client's possible loss is unrelated to the figure.
Does my professional body set a level?
Regulated professions usually do, sometimes as a calculation from fee income, and it applies across all your work.
What else should I check?
Whether defence costs are inside the limit and whether the limit is per claim or in the aggregate.