Professional Indemnity insurance

What is Professional Indemnity insurance?

A Professional Indemnity insurance policy provides protection for businesses and professionals against liabilities that arise from negligent acts, errors, or omissions made while delivering their services. It helps cover the financial impact of claims, such as legal costs, settlements, or compensation - if a client suffers a loss due to a professional mistake. 

While this cover typically focusses on economic and financial loss, it can also extend to bodily injury or property damage for certain professions, such as architects or engineers, where professional advice or design work can lead to wider consequences. 

Who needs professional indemnity insurance?

Some examples of professional indemnity insurance claims

Incorrect professional advice 
A consultant gives guidance that leads to a client making a costly business decision, resulting in financial loss. 

Design error 
An architect’s design flaw leads to expensive construction delays or structural issues, and the client seeks compensation. 

Mistake in calculations or reports 
An accountant miscalculates a tax return, causing penalties for the client, who then files a claim. 

Breach of confidentiality 
A professional accidentally shares sensitive client information, causing the client reputational or financial damage. 

Software or technical error 
An IT contractor provides a system update that unintentionally corrupts data or disrupts operations, resulting in loss for the client. 

Negligent misstatement 
A marketing agency publishes inaccurate information that harms a client’s reputation or business.