Professional indemnity insurance provides essential financial protection if your business offers professional advice for a fee.

It covers claims made against you by clients who have lost money because of your work.

You may be required to have professional indemnity insurance if you are part of a trade body or subject to industry regulation. And the right policy can cover expensive claims that would otherwise cost your business thousands in legal fees.

What does it cover?

Professional indemnity insurance can cover claims made against you for:

  • Professional negligence, e.g. you make a mistake on work for a client

  • Lost documents or data

  • Accidental breach of copyright or confidentiality

  • Defamation and libel

  • Loss of goods or money (for which you are responsible)

This comparison includes insurers that offer varying limits of indemnity, which is the maximum the policy will pay for a claim.

You can take out stand-alone cover, or combine it with public and employers' liability insurance. This covers you if your staff are injured, ill or die at work.

Get as many quotes online as possible to find the best policy for your business. If you are unsure what cover you need, speak to a broker who can get quotes and advise you.

What about work completed before you take out cover?

You will only be covered for claims made against you within the period of your policy. If you have been running your business without professional indemnity cover, ask your insurer about retroactive cover. This covers previous work, but usually costs more.

Who needs professional indemnity insurance?

If you offer your knowledge, skills or advice to paying customers, you should think about taking out a professional indemnity policy. The following professions need to have cover:

  • Solicitors

  • Accountants

  • Architects

  • Chartered surveyors

  • Financial advisers

  • Healthcare professionals

You may also want to take out cover if you work in:

  • PR or advertising

  • Consultancy

  • Graphic design

  • Journalism

Here is more on how to get the right insurance for your business

How much does professional indemnity insurance cost?

What you pay for professional indemnity insurance depends on a number of factors such as:

  • the size of your business

  • the type of business you run

  • your annual turnover

  • the limit of indemnity you need

  • the excess you're willing to pay

  • your claims history.

Remember that, as with most insurance policies, it's simply about price. Cheap professional indemnity insurance could end up costing you more if it doesn't provide the cover you need.

In order to get the best deal for your circumstances, always compare quotes from several different providers.

How to compare professional indemnity insurance

There are so many different indemnity cover options available in the insurance market, it's vital that businesses and sole traders compare several professional indemnity insurance quotes to make sure they get the amount of cover they need for a price they can afford.

Here are somethings to look out for when comparing professional indemnity insurance:

  • Policy features: When comparing an indemnity policy it's important to know exactly what each policy will cover you for.

  • Amount of cover: This is the maximum cover the policy will offer.

  • Exclusions: Every insurer will have its own set of exclusions for when a claim will not be paid. It's important to be sure of exactly what your policy doesn't cover so you don't find out after you make a claim.

How to make a claim?

In the event that you need to make a claim, make sure you notify your insurance provider in writing. Most insurance companies will have a claim form available on their website and require you to provide certain information such as:

  • Details of your business

  • Details of your indemnity insurance policy details

  • Details of the claim or circumstance

  • List of relevant documents that have been attached to the claim form

Professional indemnity insurance FAQs

Q

Will I get a certificate of insurance when I take out cover?

A

Yes, most insurers send a copy by email and by post. You can then forward your electronic copy to potential clients as proof of insurance.

Q

Do I need professional indemnity cover if I am self employed?

A

Yes, even if you do not employ anyone or you work from home, you need professional indemnity to cover any advice you give to clients.

Q

How many times can I claim on my policy?

A

Most policies let you claim as many times as you need to, as long as you do not go over the maximum indemnity limit (e.g. 1 million).

Q

Do I have to pay an excess if I claim?

A

Yes, you have to pay to claim on a professional indemnity policy. This is usually around 250 per claim.