Professional indemnity insurance
Cover options for professional businesses, including claims for negligence, defence costs and run-off cover when you stop trading.
What is professional indemnity insurance?
Professional indemnity insurance (PI) covers claims that your advice, design or professional services caused a client or third party a financial loss, for example through a mistake, an oversight or bad advice. It pays compensation you're legally liable for and the cost of defending the claim, up to the limit on your policy. It's different from public liability, which covers injury and property damage.
PIB Insurance Brokers arranges PI cover for consultants, construction professionals, surveyors, architects and engineers, solicitors, accountants, estate agents and other professional businesses. A broker can be particularly helpful when your cover is more complex, for example a contract that sets a minimum limit, a regulator's requirements, design responsibility, work outside the UK, or a claims history.
What professional indemnity insurance covers
PI policies usually combine a core of covers with optional extensions, depending on your profession and your contracts. The summaries below are general examples of what may be covered in each section; your policy schedule and wording decide what is and isn't covered in any claim.
Core covers
Professional negligence
Claims that a mistake, oversight or bad advice in your work caused a client financial loss.
Watch for: Work you do that isn't described on the policy. Describe all your services accurately.
Defence costs
Legal costs of defending a claim, even if it has no merit.
Watch for: Whether defence costs are included in the limit or paid on top of it, which varies by policy.
Breach of confidentiality and defamation
Claims that you disclosed confidential information or made defamatory statements in your work.
Watch for: Deliberate breaches.
Loss of documents
The cost of replacing or restoring documents and data you're responsible for that are lost or damaged.
Watch for: Limits on this cover, and loss caused by a lack of backups.
Optional covers to consider
Run-off cover
Cover for claims made after you stop trading or retire, for work you did before. PI covers claims made while the policy is in force, so run-off matters when you stop.
Watch for: The length of run-off, and whether it must be bought before your last policy ends.
Public liability
Injury or property damage claims from clients and the public. See our public liability insurance page.
Watch for: PI doesn't cover injury or property damage.
Cyber
Costs of responding to a data breach or cyber attack. See our cyber insurance page.
Watch for: Many PI policies exclude cyber events.
Directors' and officers' liability
Claims against your directors personally for how they run the company. See our directors and officers insurance page.
Watch for: PI covers your professional work, not how you manage the business.
Professional indemnity by profession
Insurers rate PI on what you do and who you do it for. See our pages for:
- Construction professionals. Construction professional indemnity insurance, including design and build contractors.
- Surveyors. Surveyors professional indemnity insurance.
- Architects and engineers. Architects and engineers insurance.
- Solicitors. Solicitors professional indemnity insurance.
- Accountants. Accountants insurance.
- Estate and letting agents. Estate and letting agents insurance.
How PI claims work
PI is usually written on a claims-made basis. The policy in force when a claim is made responds, not the one in force when you did the work. That's why keeping cover in place, and having a retroactive date that goes back far enough, matters. If you change insurer, check the new policy covers work you did before it started.
What professional indemnity insurance does not cover
Typical limits across PI policies:
- Problems that existed before the policy started: claims or circumstances you knew about before cover began are usually excluded.
- Deliberate acts: claims arising from deliberate wrongdoing, fraud or dishonesty are usually excluded.
- Injury and property damage: claims for bodily injury or property damage are commonly dealt with under other insurance, such as employers' liability or public liability, depending on the circumstances.
- Guarantees and contract terms beyond the law: liability you've accepted in a contract beyond what you'd have by law, such as a fitness for purpose warranty, may be excluded.
- Work before your retroactive date: claims about work done before the date shown on your policy aren't covered.
- Fees disputes and trading debts: claims about unpaid fees or your own trading debts aren't covered.
- Claims above your limit: the policy pays up to its limit of indemnity, and anything above that is usually yours to pay.
- An excess on most claims: most covers carry an excess (the amount you pay before the insurer contributes), which varies by cover.
Conditions matter too: claims may also be reduced or declined if policy conditions aren't met. Common examples: a complaint or possible claim not reported to the insurer as soon as you knew about it, or services not described on the proposal form.
How much does professional indemnity insurance cost?
There is no standard price. What you pay depends on your profession and the work you do, your fee income, the limit you choose, your claims history, the contracts you sign and where your clients are.
What affects the cost
- Your profession and work: design responsibility, financial advice and work on large projects usually cost more to insure.
- Fee income: insurers usually base the premium on your annual fees.
- The limit you choose: a higher limit usually costs more. Contracts and regulators often set a minimum.
- Risk management: written contracts, checking procedures and complaint handling may help.
- A clean claims record: insurers usually look at the last three to five years.
Why work with PIB Insurance Brokers
We explore your options
We can approach insurers that cover professional businesses and set out the differences in cover, not just price.
We look at what your contracts require
Contract limits, design responsibility, work abroad and a regulator's minimum terms may each change what you need.
We look for common gaps
A limit below what contracts require, services not described on the policy, or no run-off when you stop trading.
Here when things change
Our team is on hand throughout the policy year for advice, whether your circumstances change or you're not sure what to do next.
What our clients say
Reviews from PIB Insurance Brokers clients across the sectors we work with, collected by Reviews.io.
Need PI cover that matches your contracts?
Get a quoteFrequently asked questions
Who needs professional indemnity insurance?
Any business that gives advice, designs, or provides a professional service that clients rely on should consider it, for example consultants, surveyors, architects, engineers, solicitors, accountants, IT contractors and estate agents. Many clients and contracts require it.
Is professional indemnity insurance compulsory?
Usually not by law. But some regulators and professional bodies require their members to hold it, for example solicitors, accountants, architects and chartered surveyors, and many client contracts set a minimum limit.
Is professional indemnity insurance the same as public liability insurance?
No. Professional indemnity covers financial loss a client suffers because of your advice or professional work. Public liability covers injury to people and damage to their property. Many businesses need both. See our guide to public and product liability insurance for more.