Professional indemnity insurance

When you deal with clients they may make important business decisions based on the advice or data, which you give them. Professional indemnity (PI) insurance can protect your businesses if a client sues for losses they claim you were responsible for due to error or negligence. Professional services can include:

• Design work

• Advice or consultations 

• Accountancy and financial advice

• Marketing and graphic design

• Engineering

• Surveyors

• Healthcare workers

Professional indemnity insurance can cover potential legal and compensation costs you might incur if a third party sues you for losses sustained after using your professional services. The types of risks covered could include: 

• Breach of contract

• Professional negligence 

• Design errors

• Intellectual property and trademark disputes

• Plagiarism

• Defamation

With PI insurance you can buy cover up to £10 million for legal fees or compensation costs. Bear in mind that even if the claim against you is unsuccessful, you’ll probably incur legal costs while fighting it.

Professional indemnity insurance isn't compulsory. But that doesn’t mean it’s not a necessity. Should a a claim be made against you for malpractice or negligence a PI policy can cover:

• Your legal defence fees

• Compensation costs if the claim was successful

Some clients may ask whether you have PI insurance before they will work with you. It can be a requirement before entering into a contract. If you're a member of a professional or trade body you may need PI insurance as a condition of membership. Relevant bodies will be able to advise on how much you need.