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What is professional indemnity insurance?
Professional indemnity insurance, often referred to as PI insurance or professional liability insurance, is essential protection if you provide services, advice, or designs to clients. Designed to act as a defence in the event that you make an error in your work which results in a financial loss for your clients, professional indemnity insurance covers the costs of legal defence, and any damages awarded, helping you to operate with peace of mind, knowing you are protected against potential financial repercussions.
Professional indemnity insurance is invaluable not only when a mistake has been made, but also if a client makes any unfounded claims, as the legal expenses involved in defending yourself can be substantial. Securing coverage for these scenarios allows you to focus on your work without fear of litigation costs.
| £100,000 - £5million cover available | |
| Professional negligence | |
| Unintentional breach of confidentiality | |
| Unintentional breach of copyright | |
| Defamation and libel | |
| Loss of documents or data | |
| Loss of money or goods | |
| *The above criteria are covered by one or more of our insurers |
Why do I need professional indemnity insurance?
Regardless of how many years’ experience you have, everyone makes mistakes – and they can turn out to be very costly. For example, you could make an error whilst providing a design to a client, which results in an expensive fix, typically leaving you with the responsibility to pay any defence costs out of pocket. Securing professional indemnity insurance protects you against a costly claim.
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What does professional indemnity insurance cover?
Professional indemnity insurance covers the legal costs and expenses you may incur when defending a claim from a client, and any associated compensation or costs which could subsequently be awarded, following:
What’s covered:
| Professional negligence - such as making a mistake in a piece of work for a client or giving them poor advice | |
| Unintentional breach of copyright – such as using an image on your client’s website without permission | |
| Defamation and libel – such as making comments about a client on social media which could give the client a negative reputation | |
| Loss of documents or data | |
| Loss of money or goods which you are responsible for |
What’s not covered:
| Employee injuries – such as if your actions cause any of your employees to have an accident. To protect your business against employee injuries, consider employers’ liability insurance. | |
| Third-party injuries – such as if your actions cause a third-party to have an accident which results in injury. To safeguard your business in the event of third-party injuries or damages, consider public liability insurance. | |
| Property damage from natural disasters - such as flood or earthquake damage to your property. To protect your business property, consider commercial buildings and contents insurance. |
Who needs professional indemnity insurance?
Professional indemnity insurance can prove essential for those who:
- Provide advice, designs or professional services to clients
- Have a client who requires you to have professional indemnity cover to begin a contract
- Are in an industry whose body requires you to have professional indemnity cover to operate
This includes a wide range of occupations such as:
Business consultants
IT contractors
Creative Professionals
Architects
Surveyors
Accountants
Fitness professionals
Teachers and tutors
Marketing consultants
Engineers
Example policy documents
Below you will find an examples of the documents provided.
| Terms of business.pdf |
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Frequently asked questions
These frequently asked questions are designed to help you and include questions relating to policy cover, pricing and ‘technical’ terms.
Browse all FAQsNo, professional indemnity insurance is not a legal requirement in the UK. However, some industries or clients may require you to secure this insurance before beginning a professional relationship.
The retroactive date is generally the date that you first purchased PI insurance and means that any work undertaken after this date will be covered by your policy. Claims which arise from work undertaken before this date will not be covered.
Yes, professional indemnity insurance is tax deductible as it is considered an ‘allowable expense’.
Some examples of claims are:
- A management consultant provides a business plan to a client, which doesn’t deliver the expected results, then the client claims against you for their financial losses.
- An engineering contractor produces some CAD work for a client which contains the wrong measurements and ultimately causes long delays to the client’s project, the client then claims against you for the cost of correcting their mistake.
- A photographer’s memory card is corrupted, and you lose a full day of shots, the client then claims for reorganising the cost of a shoot.
If you have any questions, contact one of our insurance experts, here.
Further reading for professional indemnity insurance
Understanding the different types of business insurance
Written by Michael Lawrence