Professional indemnity insurance (PI) insurance

PI insurance is designed to help protect your business if a client alleges negligence, mistakes, or poor advice in your work.

For example, if a client says they’ve lost money due to your negligence, PI insurance can help cover legal and compensation costs. It can also apply if they claim your advice has damaged their reputation. 

PI insurance can support with:  

• Professional negligence or a breach of a duty of care. For example, if your client suffers loss or damage due to your negligent advice.
• Defamation. For example, a client claims you made a false statement that has damaged their reputation.
• Breach of confidence. For example, you disclose or share a client’s private information without their consent.
• Breach of copyright. For example, you use someone else’s intellectual property in client work.
• Lost or damaged documents. For example, you lose important client files, or they’re accidentally damaged or destroyed.

PI insurance does not cover:  

• Your breach of obligations as an employer. For this, employers’ liability insurance may be a legal requirement.
• Any reserved legal activity or any activity regulated by the Financial Conduct Authority, Prudential Regulatory Authority, or similar regulatory bodies.
• Any liability if you mismanaged a pension scheme.
• Anything you knew, or should reasonably have known, before taking out your policy that would likely lead to a claim or a loss.
• Any work performed before the start of the policy or the retroactive date in your schedule.
• Any acts or omissions you deliberately or recklessly commit, condone, or ignore.
• An actual or possible instance of a cyber-attack, hacking, or social engineering communication. For such cases, we may be able to offer cyber and data insurance to help. 

Please check policy documents for the full terms of this cover, including inclusions and exclusions. Policy documents are available when purchasing online. You can also contact our customer service team for more information.

PI insurance isn't legally required for all professions, but many businesses and occupations can benefit from this cover. If you offer your knowledge, skills, or advice, this insurance can help protect you against legal and compensation costs if clients claim your professional advice or services caused them financial loss.

Professions that can benefit from PI insurance include: 

• Consultants
• Web designers
• Software developers
• IT Contractors
• App Developers
• Advertising agencies
• Digital Marketers 

Some professional bodies require this cover as a condition of membership. This is often the case for:

• Accountants
• Architects
• Surveyors

Clients might also require you to hold PI insurance to meet the conditions of their contract. You may also choose to purchase this cover for added peace of mind. Examples of situations where it could apply include:

• A graphic designer sends a magazine to print with an error, leading to costly reprinting.
• A student fails to achieve their target grades and their parent blames the tutor for a failure to educate.  
• A management consultant gives negligent advice, causing the client to suffer financial loss. 

How much PI insurance you may need usually depends on various factors, such as your business size, the contracts you hold with clients, and the services you provide.

Some professional bodies require a minimum level of PI cover from their members. Your clients might also require specific coverage amounts.  

To determine how much cover you’ll need, you may find it useful to:

• Check your contracts and the value of your projects.
• Discuss with your peers or professional body.

Requirements set by professional bodies like ICAEW (external link) or RICS (external link) may change over time, so members should stay up to date on the most recent guidance.

At Hiscox, we can tailor a policy to suit your individual business needs. Note that our PI policy provides cover for your mistake, as the insured, and your legal defence costs.

Read our guide on how much PI cover you may need to learn more.