Professional Indemnity Insurance

No, Professional Indemnity Insurance is not generally required by law. However, some professional bodies, regulators and client contracts may require you to have it.

In the UK, many regulating bodies for solicitors, law firms, financial advisors, chartered surveyors and architects require their members to have some level of professional indemnity insurance.

You might also consider Professional Indemnity Insurance that’s specific to your trade. It can include cover for work like removing load-bearing walls or building extensions.

If your business offers advice, expertise, consultancy or professional services, you should consider Professional Indemnity Insurance.

It’s designed to support individuals and businesses giving professional advice, designs or services to clients.

This could include:

• accountants
• architects
• consultants
• engineers
• IT professionals
• marketing and communications agencies
• surveyors
• designers
• healthcare professionals
• financial advisors
• tradespeople.

Professional Indemnity Insurance doesn't usually cover the cost of fixing poor workmanship. However, it may cover certain claims if a mistake, error or negligence causes results in a client’s financial loss.

The cover available to you will depend on your profession and the services you provide, as well as your policy terms, conditions and exclusions. Remember to always check your policy documents to understand what’s included and excluded.

If you don’t have Professional Indemnity Insurance and a client makes a claim against your business, you may need to pay the legal costs, settlements or compensation yourself. These costs can occur even if you dispute the claim and need to defend your business.

For example, an accountant could face a claim if an error in their calculations causes a client financial loss. Or a marketing agency could face a claim if incorrect information in published material results in a client losing money.

The financial impact will depend on the circumstances of the claim, which is why businesses providing professional advice or services may choose to have Professional Indemnity Insurance in place.

While Professional Indemnity Insurance sounds somewhat similar to Public Liability Insurance, they cover two distinctly different business risks.

Professional Indemnity Insurance relates to claims about your professional services, advice or expertise.

Public Liability Insurance can protect against claims involving injury to third parties or damage to their property.

Professional Indemnity Insurance doesn’t cover every type of claim. The exclusions that apply will depend on your policy, but we’ve included examples of some common exclusions.

• Third-party technology: claims arising from defects in hardware or software provided by another business.
• Merchant services: liabilities arising from merchant services agreements.
• Personal information: claims involving the deliberate and unlawful collection or retention of personally identifiable information.
• Unfair business practices: claims alleging deceptive or unfair trade practices.
• Injury or property damage: unless it results from design, advice or consultancy services you provide as part of your insured business activities.
• Insolvency or bankruptcy: claims arising from your business becoming insolvent or bankrupt.
• Patents and trade secrets: claims involving the infringement, misuse or abuse of patents or trade secrets.
• Physical products: claims relating to tangible products that you or someone acting on your behalf makes, supplies, installs, repairs, maintains or otherwise works on.

This isn't a complete list. Always check your policy documents to understand what's covered, along with the exclusions, conditions and limits that apply to your policy.

The cost of Professional Indemnity Insurance depends on your type of business and the cover you choose. Factors can include your profession, turnover, the services you provide, claims history and level of cover.

Getting a quote online based on your business details will give you a price for the cover available to you.

Start your quote