Professional Indemnity Insurance
Protect Your Business Against Professional Negligence Claims
Even experienced professionals can make mistakes. If a client alleges that your advice, services or designs have caused them financial loss, the consequences for your business could be significant.
At Edison Ives, we arrange Professional Indemnity Insurance for businesses and professionals throughout the UK, helping protect against certain claims arising from professional errors, omissions and negligence.
Whether you’re a consultant, contractor, designer, accountant or professional services provider, we can help you explore cover suited to your business activities.
Understanding Professional Indemnity Insurance
Watch our short video explaining the benefits of Professional Indemnity Insurance and why it can be important for businesses providing professional advice or services.
Request a Professional Indemnity Insurance Quote
Tell us about your profession, the services you provide, your annual turnover and any contractual insurance requirements.
Our team can review your circumstances and approach appropriate insurers for available quotations.
What Is Professional Indemnity Insurance?
Professional Indemnity Insurance, often called PI Insurance, is designed to protect businesses against certain claims arising from professional advice, services or work.
For example, a client may allege that your business made an error, provided incorrect advice, failed to meet a professional obligation or produced defective designs, resulting in financial loss.
Depending on the policy wording and circumstances, Professional Indemnity Insurance may cover eligible compensation payments and associated legal defence costs.
Cover varies significantly between professions and insurers, making it important to arrange a policy that accurately reflects the work your business undertakes.
What Does Professional Indemnity Insurance Cover?
Professional Indemnity Insurance can provide protection against a range of professional liability exposures, subject to the insurer’s terms and exclusions.
Professional Negligence
Claims alleging that your business failed to exercise reasonable professional skill or care when providing insured services.
Errors & Omissions
Claims arising from certain mistakes, inaccuracies or failures to carry out professional duties.
Incorrect Advice
Protection against certain allegations that advice or recommendations provided to a client caused financial loss.
Design & Specification Errors
May cover claims arising from negligent professional design, specification or technical work, where insured.
Loss of Documents or Data
Some policies include protection for specified losses involving client documents or information, subject to conditions.
Intellectual Property Infringement
Certain policies may cover specified unintentional infringement claims, such as copyright infringement arising from professional services.
Breach of Professional Duty
May provide protection for certain claims alleging failure to meet professional obligations to clients.
Legal Defence Costs
May cover eligible legal costs associated with defending an insured professional liability claim.
Important: The precise scope of cover depends on the policy. Some extensions are optional, and certain losses or liabilities may be excluded.
Who Needs Professional Indemnity Insurance?
Professional Indemnity Insurance is particularly relevant for businesses providing advice, designs, consultancy or specialist professional services.
Consultants & Business Advisers
Businesses providing specialist recommendations, strategic advice or consultancy services.
Accountants & Bookkeepers
Professionals providing financial, accounting, bookkeeping and related services.
Architects & Engineers
Professionals responsible for design, technical advice, calculations or specifications.
IT Consultants & Technology Businesses
Businesses providing IT consultancy, technology advice, systems implementation or other specialist services.
Marketing & Creative Agencies
Businesses providing marketing, advertising, design, content or creative professional services.
Construction & Design Contractors
Contractors undertaking professional design, specification or other responsibilities under their contracts.
Surveyors & Property Professionals
Professionals providing valuations, surveying, property consultancy or related advice.
Other Professional Services
Specialist businesses whose advice or professional work could result in a client suffering financial loss.
Is Professional Indemnity Insurance a Legal Requirement?
Professional Indemnity Insurance is not a general legal requirement for every UK business.
However, certain regulated professions must maintain suitable insurance under their professional or regulatory requirements.
Other businesses may need Professional Indemnity Insurance because a client, principal contractor, professional body or commercial contract requires it.
If your business provides professional advice or services, it is worth considering the potential financial consequences of a claim even where insurance is not compulsory.
Examples of Professional Indemnity Insurance Claims
IT Consultant Error
An IT consultant makes an error during a client project, allegedly resulting in data loss and associated financial losses.
Accountancy Mistake
An accountancy firm makes an error in professional work, and a client alleges that the mistake caused them financial loss.
Design Error
A contractor or designer produces an allegedly incorrect specification, leading to project delays and additional costs.
Marketing Agency Claim
A marketing agency faces an allegation of unintentional copyright infringement arising from work produced for a client.
These examples are illustrative only. Whether a claim is insured depends on the circumstances, policy wording and applicable exclusions.
How Much Professional Indemnity Insurance Do I Need?
The appropriate level of Professional Indemnity Insurance depends on your profession, the value and nature of your work, the potential size of a claim and any contractual or regulatory requirements.
At Edison Ives, we can explore Professional Indemnity Insurance limits ranging from £25,000 to £20 million, subject to insurer availability and underwriting.
Lower Cover Limits
May be considered for certain smaller businesses with relatively limited professional exposures, where appropriate.
£1 Million Cover
A commonly requested limit for a variety of professional and commercial contracts.
£2 Million to £5 Million Cover
May be required for larger projects, more substantial professional exposures or particular contractual obligations.
Higher Cover Limits
Specialist arrangements may be available for businesses requiring substantial Professional Indemnity Insurance limits.
Limits may apply on an aggregate or any-one-claim basis. Legal defence costs may also fall within the policy limit, depending on the wording.
How Does Claims-Made Professional Indemnity Insurance Work?
Professional Indemnity Insurance is commonly arranged on a claims-made basis.
This generally means the policy responds to qualifying claims first made against the insured and notified in accordance with the policy requirements during the period of insurance, subject to any retroactive date and other conditions.
This is important because professional mistakes may not become apparent until months or years after the original work was completed.
When changing insurers or cancelling cover, businesses should consider continuity of protection, retroactive dates and whether run-off insurance is required.
Our team can help you understand these considerations when reviewing your arrangements.
What Does Professional Indemnity Insurance Not Cover?
Professional Indemnity Insurance is not designed to replace every type of business insurance.
Common exclusions or limitations may include:
- Deliberate dishonest or fraudulent acts, subject to the wording and any innocent-insured provisions.
- Known claims or circumstances that should have been disclosed before cover began.
- Claims arising from activities outside the insured professional services.
- Contractual liabilities beyond those that would otherwise exist, unless specifically covered.
- Fines, penalties and other amounts that are uninsurable or excluded.
- Employee injury claims normally addressed by Employers’ Liability Insurance.
- Certain bodily injury or property damage claims normally addressed by liability insurance.
Every policy is different, so the insurer’s wording, schedule and endorsements should be checked carefully.
How Much Does Professional Indemnity Insurance Cost?
Professional Indemnity Insurance premiums vary depending on the type of professional work undertaken and the level of risk involved.
Your Profession
The nature of the professional services you provide can significantly influence pricing.
Turnover & Contract Values
Your annual income, client base and project values may affect the insurer’s assessment.
Cover Limit & Excess
The selected indemnity limit, excess and policy extensions can influence the premium.
Claims History
Previous claims and known circumstances may affect the availability and cost of cover.
For eligible policies, premium finance or instalment arrangements may be available, subject to approval, charges and applicable terms.
Combine Professional Indemnity with Other Business Insurance
Depending on your activities, Professional Indemnity Insurance can be arranged alongside other business covers.
Public Liability Insurance
Protection against certain third-party injury or property damage claims arising from business activities.
Employers’ Liability Insurance
Cover for eligible employee injury or illness claims, generally compulsory for businesses with employees, subject to exemptions.
Cyber Insurance
Specialist cover for certain cyber incidents, data breaches and related business exposures.
Business Property Insurance
Protection for insured premises, contents and business equipment against specified events.
Why Choose Edison Ives for Professional Indemnity Insurance?
Professional Indemnity Insurance requires careful consideration of the services you provide and the liabilities you may face.
At Edison Ives, we take time to understand your profession, business activities and contractual requirements before exploring suitable insurance options.
We can help you compare important policy features, including cover limits, exclusions, excesses, retroactive dates and relevant extensions.
Our aim is to provide straightforward, personal advice and help you make informed decisions about your business insurance.
Looking for Professional Indemnity Insurance?
Whether you’re arranging your first policy, meeting a contractual requirement or reviewing your existing cover, Edison Ives can help.
Speak to Our Professional Indemnity Insurance Team
Call 0113 390 4646
Email info@edinsure.co.uk