Professional indemnity insurance

• Breach of professional duty - when you fail to live up to your duty of care, e.g. giving incorrect advice or making a mistake in your work.
• A dishonest, fraudulent or malicious act or omission of any former or present employee. This includes employees lying, stealing or withholding information from your clients as well as revealing confidential information.
• Libel or slander - using or producing written or spoken statements or materials that damage a client's reputation.
• Unintentional breach of confidentiality - when confidential data or information is accidentally disclosed to a third party without the client's consent, such as sensitive data being accidentally sent to the wrong person.
• Unintentional infringement of intellectual property rights - e.g. accidentally violating intellectual property, copyrights and trademarks, including imitation or passing another's products or services off as your own.
• Loss of, or damage to, documents - this includes documents that are lost in the post or even stolen while in your care. It also covers the cost of recovering the documents, if this is possible.

Professional indemnity insurance is important if you offer advice or professional services to a client. That means if any of the following apply, you might need cover:

• You give advice to clients regarding professional services or designs
• You handle sensitive data or software on behalf of a client
• Your industry or client require you to have professional indemnity cover to operate

Even the most seasoned professional can make a mistake. You could accidentally email confidential information to the wrong contact, release the wrong version of new software or make an error in the design of a lighting circuit. Each of these human errors could leave you open to legal action.

If you run a digital company, you may also want professional indemnity cover to safeguard your business against claims for copyright infringement.

Even if you believe you haven't done anything wrong, you will still need to pay for the legal costs of defending yourself in court. So having the right cover in place is important.

The price of professional indemnity insurance depends on your business and personal circumstances. You can add professional indemnity to your policy by clicking on our online quote finder. Just answer a few questions about your business and we'll provide you with a rundown of the cover we can offer.

You are not legally required to hold professional indemnity but a number of professional associations won't let you join their ranks without it. Here's a list of organisations that require you to hold professional indemnity cover:

• The Chartered Institute of Taxation (CIOT)
• Association of Taxation Technicians (ATT)
• Institute of Chartered Accountants in England and Wales (ICAEW)
• Institute of Chartered Accountants in Scotland (ICAS)
• Association of Chartered Certified Accountants (ACCA)
• Chartered Institute of Management Accountants (CIMA)
• Institute of Certified Bookkeepers
• Architects Registration Board (ARB)
• Royal Institute of British Architects (RIBA)

Even if these groups are not relevant to your business, if you work as a professional consultant or have any dealings with local authorities, it's a good idea to look into professional indemnity insurance. Some clients will ask to see proof of cover before they hire you.

Some clients will also state the value of the cover required as a condition of business, which will give you some guidance on how much cover you might want to take out.