The level of cover is for your practice, for all projects for the insurance year.  PI cover does not relate to individual projects, but if you need to, you can increase your cover at any stage during the year.

A key decision you need to make is the level of cover you are seeking.  Some clients are requiring a minimum level of cover, and if you want to work with them you will need to carry that level of cover in order to meet the terms of engagement.  Otherwise, it is a matter of the risk you are prepared to carry, versus the cost of passing that risk to an insurer.

The purpose of the PI cover is to protect your assets and business in the event of a claim.  You need to think carefully before exposing those resources to risk.  A doubling of your cover (for example) would typically be at a marginal cost (maybe 20-50%) and not a doubling of the premium.  

Many smaller practices and sole traders are tempted to limit PI cover to the minimum $250k set out in the NZIA AAS agreements.  But those practices also tend to be doing residential work, where the liability will NOT be capped at $250k, because the Consumer Guarantees Act exposes those practices to unlimited liability.  Yes, you might attempt to hide behind a family trust or a limited liability company to avoid the prospect of becoming personally liable for that part of a successful claim in excess of $250k.  BUT claimants have successfully recovered money on the basis that a beneficiary to a trust has the resources of the trust available to meet a claim.  AND if you were a director of the company and personally involved in the failed project, then the prospect of a personal claim against you is very real.