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Professional Indemnity Insurance - do I need it?

Updated: May 4

Do you provide advice or a professional service to clients? If so, it may be advisable to consider professional indemnity (PI) insurance


Do I need Professional Indemnity Insurance

What is Professional Indemnity Insurance


It’s a type of business insurance that can provide cover for disputes arising from a mistake or allegations of negligence.Most businesses invest time and effort into looking after their customers and building up a good professional reputation.


Unfortunately, mistakes can happen and disputes can arise, often leading to hours of worry, expense, bad publicity and even significant damage to your professional reputation. Professional Indemnity insurance can help take away some of the worry and defend your claim in court should it come to that.Some real world examples that could lead to a dispute and a claim for financial damage:


• A website hosting company accidentally deletes clients’ websites

• An architect specifies inadequate materials for a construction project

• An IT specialist installing software onto a client’s system accidentally corrupts important files

• An advertising agency prints the wrong telephone number on a client’s advert

• An employee accidentally posts confidential client information on the company website

• An accountant uses an outdated form which results in their client underpaying their tax returns

• A business consultant provides strategic consultancy which leads to legal repercussions, fines or loss of business for their clients

• A direct mailing firm accidentally sends out the incorrect draft of a mailshot containing wrong or defamatory information

• A logistics firm directs deliveries to incorrect addresses

• A marketing firm suggests a brand name that means something negative in another language


Basically if a business can get things wrong in the provision of a professional service they have an exposure.


What does PI cover?


Where the insured firm or party are legally liable, whereas insurance such as Public Liability is designed to cover against physical damage, Professional Indemnity insurance is designed to cover financial damage which a client may claim has arisen as a result of negligence, error or omission, misstatement or misrepresentation arising out of professional services. Over and above the standard errors and omissions cover, many PI policies may also include cover for claims made against you which arise from:


• Loss of documents in many different formats

• Accidentally releasing confidential information about clients

• Accidentally saying or writing something which is deemed defamatory

• Unintentional use of third party copyrighted images, texts or designs

• Dishonest acts of employees.


If you would a professional indemnity quotation or you have any questions please do not hesitate to contact us.

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