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Professional Indemnity Insurance

What is it?Why is it required?What is covered / excluded?Do I need it?
How much & costProfessional Indemnity Insurance Companies
Professional Indemnity Cover
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What is Professional Indemnity Insurance?


Known as professional indemnity insurance, this type of liability cover provides protection for negligent advice or a service provided by you, and is designed to safeguard you against claims made by clients for any resulting financial loss or damage to their reputation.

This type of insurance should also cover legal fees and costs.

The most common professional liability lawsuits arise from:

  • Negligence, omission or error
  • Unintentional breach of intellectual property rights (copyright, trademarks, broadcasting rights, passing off ie Breach of Implied Statutory Terms under the Sale of Goods Act 1979 and Supply of Goods and Services Act 1982)
  • Loss of clients' original documents or data (these could be damaged, lost in the post or even stolen while in your care)
  • Unintentional slander or libel
  • Unintentional misuse or breach of confidential information (Data Protection Act) or breach of confidence

Why is it Required

Professional indemnity insurance is required to fend of spurious claims and in defending allegations from dissatisfied clients.

Who Requires Professional Indemnity Insurance?

Individuals and companies which provide professional advice or consultancy services need Indemnity cover. Including for example:

  • Accountants
  • Architects
  • Computer Consultants
  • Engineers
  • Independent Financial Advisors
  • Commercial Finance Brokers
  • Insurance Consultants
  • IT Professionals
  • Medical Professionals, Doctors & Nurses
  • Management Consultants
  • Optometrists
  • Surveyors

Generally, the riskier the nature of a profession, the higher will be the premium.

What is Covered/Excluded


Professional indemnity insurance protect you against damages you become liable for mistakes such as errors of judgement, basic administration errors, mislay or damage clients' documents etc. resulting loss of business and damage to reputation.


These may include: Claims above an agreed amount, cover after the policy has not been renewed, specific vetoed activities, overseas work, retroactive cover.

Do I Need It

Yes, if your business offers know-how or skills in a particular field for example if you are a self employed:

  • Accountant
  • Architect
  • Computer Consultant
  • Engineer
  • Independent Financial Advisor
  • Insurance Consultant
  • IT Professional
  • Medical Professional, Doctor & Nurse
  • Management Consultant
  • Optometrist
  • Surveyor

How Much and The Cost

£2 to 5 million worth of professional liability cover is genrally considered adequate by government departments for example, and go for the highest possible level you can afford. Approx. costs for computer consultancy are £170 per annum for each £100,000 of cover

The cost of the premium will depend on the:

  1. type of the business
  2. turnover
  3. number of employees
  4. level of risk

How Do I get Quotes?

Depending on the complexity of cover you need you can buy online or contact an independent insurance broker