Professional indemnity (PI) insurance is an insurance product that will protect you in the event that your business is sued by a client. This could happen if a client is unhappy with the work you’ve produced or professional advice you’ve provided. Even if you haven’t made a mistake, you may still have to fight a claim and this form of insurance will help to settle disputes and cover the cost of your legal defence.

If you’re a professional business that provides advice and services to your clients, PI cover should be seen as an essential consideration for your business insurance package. It’s important that you feel confident in the quality of your work, but even with the best intentions, accidental errors and disputes over quality can happen.

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Our guide to professional indemnity insurance

What is professional indemnity insurance?

Do I need professional indemnity insurance?

If your business provides a professional service or advice to other businesses, or handles client data and intellectual property, it is worth considering professional indemnity insurance to protect your business from the risks associated with the territory. For some professional bodies and regulators, it is a legal requirement for members to hold PI insurance.

Read more on who needs professional indemnity insurance?

What does professional indemnity insurance cover?

Professional indemnity insuranceovers you in case you need to pay to correct a mistake, or to cover legal costs, if you make an error in your work. While this falls under cover for ‘negligence’, you should also consider a policy that offers cover for intellectual property, dishonesty, defamation and loss of documents too.

You would draw upon your professional indemnity insurance if, for example, an employee sends a gossipy email about a difficult client to a supplier and copies in the client by accident. You may also need it if your IT system fails, causing you to lose some of your client data or documents, and they’re difficult and costly to retrieve it. A case for infringement of intellectual property rights could arise when incorporating copyrighted stock images without permission without asking for permission first.

PI insurance can cover you for all these eventualities from the start of your policy, but if you’re worried that work you’ve already done may need to be protected against a claim you can also get a retroactive date for your policy.

How much does professional indemnity insurance cost?

The cost of professional indemnity insurance depends on factors such as the amount of cover your business needs and the nature of your work. Hiscox professional indemnity quotes start from £100 a year (based on policies from at least 10% of our customers), with some higher policies covering up to £10,000,000. Cover can be tailored to a wide range of professions to protect from the most common risks your business could face.

Read more on how much professional indemnity insurance costs

Who needs professional indemnity insurance?

Any business that provides a professional service or advice to other businesses, or handles client data and intellectual property, will benefit from having some level of professional indemnity insurance. This will cover them for compensation and legal costs incurred if they were to face a claim or lawsuit, in the case a client feels a mistake was made, there was negligence, or work was of a poor standard.

Read more on how much professional indemnity insurance do I need?


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