Professional indemnity insurance

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    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on April 24, 2024. Next review due April 6, 2025.

    Many individuals and businesses sell information and advice to their customers. Unfortunately, if that information is wrong or misleading, it can cause financial loss or other damage to their clientele. Claims for compensation can then cost thousands or even millions of pounds to settle. Instead, professionals and businesses exposed to this sort of risk will purchase professional indemnity insurance to protect them from financial disaster caused by a misplaced word or a slip of the pen. 

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      What is professional indemnity insurance?

      Professional indemnity insurance – also known as professional liability insurance – covers businesses and individuals that advise clients, help them navigate complex financial or legal affairs, or provide them with vital information that may be published in the media. Professional indemnity (PI) can protect you if a client makes a financial loss because of fault in your work and then makes claim against your business. Trade associations, government bodies, public institutions, and major customers will often require proof of a minimum level of PI insurance before doing business with you.

      Do I need professional indemnity insurance?

      If you offer knowledge, skills or advice to clients and customers – either as a self-employed individual or for a company – then yes you do. The potential cost of claims arising from any errors in the services you provide can far outweigh the cost of the policy. Typical cover will range from £50,000 to £5million, but the amount of cover you need will vary depending on your profession, your clientele, and the type of information and services you provide. 

      Why do I need professional indemnity insurance?

      Firstly, some professions are required by their trade bodies or guilds to have professional indemnity insurance in place. This includes:

      • Accountants
      • Solicitors and barristers
      • Architects
      • Financial advisers
      • Chartered surveyors
      • Some healthcare professionals

      Secondly, many other types of business expose themselves to claim because their work is published in the media, provides industry-standard guidelines, or has legal and political impact. Businesses and occupations most at risk include:

      • Journalists and authors
      • Publishers
      • Advertising and PR agencies
      • Entertainment businesses
      • IT contractors
      • Design agencies
      • Research facilities
      • Web developers
      • Some educational institutions

      Important tip: You can be held liable for bad or misleading information or services even if you or your organisation provided them for free.

      Is professional indemnity insurance a legal requirement?

      No. Only employers’ liability insurance is legally required. Other business insurances are optional, although some clients and organisations may require you to have professional indemnity insurance in place before they will trade with you.

      What does professional indemnity insurance cover?

      Professional indemnity insurance is designed to cover a range of issues that may arise from the information, skills and services you or your business provides:

      Professional negligence

      This is also known as ‘breach of duty of care’. Professional indemnity insurance covers you in the event that a client suffers loss or damage because of faulty advice.


      To defame someone is to make a false statement or do something that harms their reputation or casts their character in a bad light. Journalists, authors, TV reporters and even some celebrities, such as stand-up comedians, are most at risk from this type of claim. 

      Breach of confidence

      Covers you in the event that a client or customer claims they have suffered loss or damage because you have shared their confidential information without their permission.

      Breach of copyright

      Covers you from claims that state you have utilised copyright protected intellectual property (IP) – typically manuscripts, plans, drawings, patents, etc – without the original author’s permission. Note that you do not have to have re-used the IP for financial gain to be at risk. 

      Lost or damaged documents

      PI protects you in the event that a client or customer claims they have suffered financial or other loss because you have lost or damaged their important documents through accident or lack of care.

      Employee cover

      Covers your business from liability claims made because of fraud or dishonesty by your employees or any sub-contractors, consultants and freelancers you have hired to work on a project. 

      How much does professional indemnity insurance cost?

      Premiums for professional indemnity insurance can start at less than £8 per month, but costs will vary depending on your profession and the type of information, advice and services you provide.

      How Swoop can help

      All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let a slip of the pen, bad advice, or wrong information wrongfoot your business. Contact Swoop today to compare top-quality professional indemnity cover from different providers and to discuss all your business insurance needs. 

      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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