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)
Insurers may 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.
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.
Do you need it?
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:
You may also want to take out cover if you work in:
PR or advertising