Professional indemnity claims: Examples and how to avoid them

Failure-to-meet-specification claims frequently result from vague briefs, verbal instructions, and assumptions made under time pressure. They are one of the most frequently reported types of PI claims across creative, consultancy, IT, and technical professions. 

Ways you can reduce the risk of a PI claim: 

2. Incorrect advice causes financial loss 

An example of what could happen: 

A business relied on professional advice that later proved incorrect or incomplete. As a result, the client faced defence costs, mitigation of losses, and legal representation. 

An example of a PI claim which could follow: 

The client claimed the professional failed in their duty of care and sought compensation for financial losses. 

Why these PI claims are common: 

Advice-led claims are a core driver of PI losses – especially where rules, regulations or compliance issues are involved. Design mistakes can contribute to a significant part of losses; however, a considerable number of claims are also formed from HR-related roles. 

Ways you can reduce the risk of a PI claim: 

3. Errors or omissions in work delivered 

An example of what could happen: 

A professional made an unintentional error, such as an incorrect calculation, specification mistake, or oversight, that later caused delay, rework, or additional expense. 

An example of a PI claim which could follow: 

The client alleged professional negligence and sought recovery of costs linked to fixing the error. 

Why these PI claims are common: 

Small technical mistakes can often form the basis of high‑value PI claims, even when the original fee was on the smaller side, as delays can hold back larger parts of certain projects. 

Ways you can reduce the risk of a PI claim: 

4. Copyright or intellectual property infringement  

An example of what could happen: 

A professional used material they believed was licensed or original, but a third-party alleged copyright infringement. 

An example of a PI claim which could follow: 

Legal action was taken for damages and legal costs. 

Why these PI claims are common: 

Marketing, design, digital and consultancy businesses are particularly exposed, with intellectual property disputes becoming a growing PI claim area. Alongside the rise of AI, there is potential for a further increase in intellectual property or copyright infringement claims due to a lack of source format knowledge. 

Ways you can reduce the risk of a PI claim: 

5. Data handling and confidentiality breaches 

An example of what could happen: 

Sensitive client data was accidentally exposed, lost or misused during professional work.  

An example of a PI claim which could follow: 

Clients pursued losses linked to respective losses and resulting incidents – it must be deemed to not be a cyber risk issue as PI insurance would not cover this. 

Why these PI claims are common: 

Data‑related PI claims are increasingly common, especially for IT‑linked and compliance‑led roles, due to the sensitivity of certain data.  

Ways you can reduce the risk of a PI claim: 

Please note: Your insurer documentation will detail whether the above examples of professional indemnity insurance claims are covered. 

To access more advice for small businesses and self-employed professionals, visit our knowledge hub, or if you would like to explore our small business insurance solutions, you can learn more here.  

Please note: This article provides guidance for information purposes only and is accurate at the time of production. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional.