Professional indemnity insurance covers the costs you are required to pay if a client accuses you of negligence and makes a claim against your business. For example, if the client believes that following your professional advice caused them to lose money or suffer reputational damage.
Professional indemnity insurance covers the costs of correcting mistakes, settling a claim, and any legal fees that you face when defending your business.
When you or your business fail to live up to your duty of care, e.g. giving incorrect advice or making a mistake in your work.
This includes employees lying, stealing or withholding information from your clients as well as revealing confidential information.
Using or producing written or spoken statements or materials that damage a client’s reputation.
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.
Examples include: accidentally violating intellectual property, copyrights, and trademarks, including imitation or passing another’s products or services off as your own.
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 can cover you if your business deals with the following:
Professional indemnity insurance is important if you offer advice or professional services to a client. If a client believes your work has harmed their business or caused them a financial loss, they could make a claim against you.
Even the most seasoned professional makes mistakes. 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 new garden. Each of these human errors could leave you open to legal action.
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.
If you run a digital company, you may also want professional indemnity cover to safeguard your business against claims for copyright infringement.
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:
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 is advisable to add professional indemnity to your insurance policy. Certain clients won’t hire you if you don’t have cover, so if you want to avoid missing out on work, it makes sense to have professional indemnity in place.
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.
We offer cover from £100,000 all the way up to £5 million, for certain trades. To get an idea of the amount of cover you need, review the following:
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.