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What is Professional Indemnity insurance?

Professional Indemnity, commonly known as just ‘PI’ protects your business against the costly legal fees in defending an allegation of financial loss suffered by a third party following your error and/or omission. This often results from providing incorrect designs or sub-standard advice to clients.

Legal action is costly to defend as professionals such as solicitors and barristers do not come cheap, and to this the compensation costs to the third party to rectify the matter and you can quickly hit hundreds of thousands of pounds in a single claim. Ensuring this is covered is key to allowing you and your business to focus on your core activities and to continue trading.

An allegation is just that, so it is worth keeping in mind that even if you have done nothing wrong and a third party makes a frivolous or unfounded claim, it will cost a significant amount of money and time to defend the matter.

So how much does PI cost? Insurers base the cost on a range of factors, the main ones being the size of the business i.e. the bigger you are the more you will likely have at stake, and the nature of the work you do i.e. the risker the services you provide the higher the cost.

Professional Indemnity Insurance Policy Features

Defence costs

Cover for the legal costs and expenses incurred in relation to the investigation and defence of a claim, including any appeal issued in connection with it. Compensation is covered separately, giving you double the coverage.


Cover for damages and awards which your business is legally liable to pay as compensation arising from any negligent act, error or omission that emanates from your business providing its professional services.

Additional extras

– Libel or slander
– Unintentional breach of confidentiality
– Unintentional infringement of intellectual property rights
– Loss of, or damage to, documents

professional indemnity insurance

Common PI Questions

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Why do I need PI?

PI is crucial for those who provide designs, advice or professional services to clients, where a client contractually insists you hold the insurance before commencing work for them, and where a membership body mandates it as a requirement under their affiliation.

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Who needs PI?

– IT contractors & consultants
– Business & management consultants
– Technical & engineering contractors
– Accountants
– Surveyors & architects

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But I don't make mistakes!

We all take pride in our work, as our reputation rides on it. However, even the most experienced professional can make a mistake, or have an allegation of one made against them. Human error can occur, and one inadvertent oversight or click of a mouse could cost you millions.