Who needs professional indemnity insurance?

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Do I need professional indemnity insurance?

Anyone who provides a professional service, gives advice, handles client data or business, or is responsible for intellectual property, should consider taking out professional indemnity (PI) insurance. Holding PI insurance might also be a condition of a contract that you undertake, or of a professional body that you belong to, so this is worth checking.

The reality is that any small business providing a professional service that can be challenged is vulnerable to a claim of negligence when the advice or service fails to meet a client’s expectations. From allegations of a breach of copyright to accusations of defamation, these kinds of claims can be costly and disruptive regardless of whether they’re fair or not.

The key reason for taking out professional indemnity insurance, is to provide a safety net in case you need to pay to correct a mistake, or to cover legal costs, if you make an error in your work.

Is professional indemnity insurance mandatory in your field?

Certain professional bodies require you to have PI insurance in order to be a member, while in a similar vein, some clients will require contractors to hold PI insurance. Examples of professions that contractually require PI insurance are business management and training consultants, IT contractors, financial contractors, energy sector contractors and engineering contractors.


You may need professional indemnity insurance if you:

  • provide expertise, skills or advice to clients
  • have access to clients' confidential information
  • produce materials that could infringe intellectual property rights
  • provide a professional service and could be challenged on your work


Cover tailored to your business sector or needs

It’s crucial that you choose a business insurance policy that’s tailored to your specific business sector or needs. For example, an unintentional breach of a written contract to supply software or hardware is a common claim in the IT sector. Another example is for businesses in media, marketing and PR, to protect the business if confidential information is accidentally leaked ahead of a press launch.

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