Echo Romeo
I created a thread on this subject a few weeks back (
here), and I would really recommend reading the article in the LAA magazine for which I provided a
link (same piece as referred to earlier in this thread).
As the article shows, £125k for passenger liability seems very low in the context of the types of compensation claims which are now being paid out on.
However a bigger question is whether you should even be arranging separate passenger liability cover and whether it might not be better to arrange cover based on a combined single limit (CSL) to encompass both the third party and passenger liability limits. This subject is again explained in the article.
While there are no absolute rules, I believe that CSL is often a better approach for light aircraft owners. The article suggests CSL is the norm amongst owners in the UK although your post suggests otherwise.
Cheers,