22 July 2025
(5-minute read)
What is professional indemnity insurance?
Professional indemnity insurance can provide crucial protection for you against claims alleging that the services, advice or designs you supplied were inadequate, not as expected or have resulted in financial loss to your client. The cover helps to give you peace of mind in knowing your business is protected from the potential financial repercussions of a claim.
You should consider protecting your business in as many ways as possible as, despite your experience and professionalism, mistakes can still happen. Below is our guide to professional indemnity insurance cover, explaining why it is important and how to secure it.
What is professional indemnity insurance?
Professional indemnity insurance, often referred to as PI insurance, professional liability insurance or PII, is a type of insurance that can help cover the legal costs and expenses incurred in your defence, as well as any compensation that may be awarded in a claim. For example, if a mistake is made in your architect business while providing a design for a client, they could take legal action. This would leave you responsible for covering defence costs and any compensation awarded to rectify the design.
What is the importance of professional indemnity insurance?
Having professional indemnity insurance allows you to operate confidently, financially plan and work towards long-term goals, knowing you are protected against potential unforeseen events.
We know that you strive to provide the best possible service to your clients. However, sometimes things go wrong. For this reason, it is wise to be covered with professional indemnity insurance.
Securing professional indemnity insurance provides you with:
✔ Financial protection – the cost of compensation payments awarded, and legal fees are covered.
✔ Legal defence - even if you have done nothing wrong, and a client makes an unfounded claim against you, it can cost significant amounts to defend yourself. The legal costs of defending a claim made against your business will be covered.
✔ Strengthened reputation – being covered reassures clients that your business is prepared and dependable, which is important to build trust. Professional indemnity insurance also makes sure you aren’t prevented from being able to apply for certain business opportunities, as some clients could require you to have cover. Additionally, many professions may need to have a minimum amount of cover as part of their respective industry body's regulatory requirements, such as architects, surveyors, food and safety consultants, school inspectors and travel consultants.
Don’t let a claim cause significant time disruption, allow insurers to handle the matter on your behalf so you can continue running your business.
When should I secure professional indemnity insurance?
Having professional indemnity insurance in place as soon as you start working with clients can be beneficial to ensure you are covered for any mistakes or negligence from day one.
Professional indemnity insurance operates on a ‘claims made basis’. This means that your insurer will only cover claims if the policy is active when:
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The mistake happens
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The claim comes in
How to buy professional indemnity insurance
Firstly, you need to consider how much cover you need. This will vary depending on the risks your business faces and what is required by existing or potential clients and regulatory bodies.
Get an online quote using the button below to find the right business insurance for your individual needs, or if you’re unsure as to exactly what you need, we are happy to offer further guidance and information, and give you a quote. You can call our insurance experts on 0333 070 6013.
If you are happy with the quote and wish to proceed, you can purchase your insurance online. Once this is done, you will receive your policy documents as proof of your cover instantly via email.
How much is professional indemnity insurance?
The cost of professional indemnity insurance is based on the nature of your business (the industry it is in and what it does on a day-to-day basis), the number of people you employ, your insurance claims’ history and how much cover you require.
What types of businesses need professional indemnity insurance?
- If you provide advice, designs or professional services to your clients – for example, agricultural consultants and jewellery designers.
- If a client requires you to have professional indemnity cover to begin a contract – for example, architects.
- If your industry body/regulatory body requires you to have professional indemnity cover to operate – for example, translators.
- If you want protection against allegations of mistakes or negligence in the work you undertake – for example, therapists.
- If you handle confidential data and information – for example, accountants.
If you fall below any of the above, you should consider professional indemnity insurance.
This includes:
- Fitness Instructors – a client could injure themselves during a session and make a claim against you, alleging that you failed to properly explain how to perform the exercise.
- Photographers – a client could allege that the photographs taken aren't suitable for use, so they claim against you for the cost of reorganising the shoot.
- Nurses – patient’s allergies could not be documented correctly, resulting in a severe allergic reaction and a professional negligence claim.
Please note: This article provides guidance for information purposes only. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. Here at Ollo insurance, our advisors are on hand to assist you in discussing your insurance needs, or any of the information in this article.
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Michael LawrenceBroker Manager |
Frequently asked questions
Browse all FAQsPublic liability provides cover against claims for injury and property damage. For example, a visitor to your art gallery slips over when walking around.
Whereas professional indemnity insurance provides cover for claims brought against you for the work you produce and the professional advice you provide. For example, your negligence as a therapist could also lead to private information being lost or disclosed to others.
If you need to claim on your professional indemnity insurance, contact your insurance company straight away.
You can contact Ollo Insurance, here.
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Written by Michael Lawrence