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Professional indemnity insurance, PI insurance,

Professional Indemnity Insurance

Professional Indemnity Insurance (PI insurance) is liability insurance that covers your legal liabilities in the event of a third party taking legal action against you, claiming to have suffered a loss as a result of advice that you have given in a professional capacity.

Professional Indemnity Insurance is compulsory for some professional trades and services. These tend to be the more traditional professions such as independent financial advisers, solicitors, insurance brokers, accountant and architects.

However the increased use of external consultants and outsourcing other services means that more businesses should consider their risks.

A ‘professional’ is now generally regarded as any person who offers ‘specialist advice or services’. This definition can include IT consultants, business consultants, marketing consultants, management consultants, interior designers, graphic designers and many more. Here are some of the things that could give rise to a claim against your business and for which you could be covered by professional indemnity insurance:

  • Professional negligence or breach of duty of care
  • Infringement of copyright and intellectual property rights
  • Breach of confidentiality
  • Libel and slander
  • Loss of or damage to documents or data belonging to your clients
  • Dishonesty of your employees


Without Professional Indemnity Insurance companies run the risk of being sued for all sorts of claims and having to foot the bill. As a professional, you owe a legal ‘duty of care’ to your clients. If you breach that duty of care by making a mistake in the services you provide, your client can claim compensation from you for losses and expenses caused by your negligence.

Today’s commercial environment is becoming increasingly litigious with clients seeking compensation far more frequently than in the past. Even if the allegation made against you is false, the legal costs involved in defending the claim can be very high.

Without a valid Professional Indemnity insurance policy you will be left to defend the allegations and will have to instruct a lawyer and pay for the subsequent legal costs involved. In the majority of cases the claim will settle before going to court, but even in very minor disputes the legal costs can build up very rapidly.

With the right Professional Indemnity policy, the only cost you’ll have to pay is the excess on the policy, no matter how high the legal costs involved!

For more information regarding arranging Professional Indemnity Insurance see here.

For further information, please contact us today.

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