What does professional indemnity cover?


Professional indemnity insurance could be considered an effective way of protecting yourself financially if you provide professional advice or a service.

Professionals such as architects, accountants, engineers, estate agents, consultants, designers and contractors may be familiar with this form of business insurance, however it should not be overlooked by other trades.

Often known as professional indemnity insurance, professional indemnity insurance is not always a legal requirement but it can be mandatory for some professions; many trade associations and guilds will insist that a professional obtains PI insurance in order to become a member.

Professional indemnity insurance could cover your business against claims made by a client or a third party in the event that you make a mistake or are found to have been negligent in some or all of the services that you have provided. Claims usually arise because a financial loss has been suffered by the client or third-party.

Investing in a professional indemnity insurance policy could cover you for claims which arise as a result of:

•  Negligence, error or omission

•  Misplacement or damage to documents

•  Unintentional breach of confidence, confidential duty or misuse of information

•  Unintentional infringement of intellectual property rights

•  Implied statutory terms (e.g. Sale of Goods Act 1979, Sale of Goods and Services Act 1982 and similar legislation)

Examples of incidents that are likely to result in a professional indemnity claim could be:

•  An accountant loses documents; the client could make a claim for loss of documents due to negligence, breach of confidentiality and possibly future complications.

•  An estate agent claiming a property was double glazed when it wasn’t; the client could claim for omission, infringement of intellectual property rights and the cost of installing double glazing.

•  Company registration agents confirmed that a company could trade under a specific name which was already being used; client could make a claim for negligence and omission damaged reputation.

•  An architect puts together a design for a building which included errors such as incorrect measurements; claims could be brought against them for negligence and breaching of confidence.

•  Consulting engineers negligent in their design of waste heating and boilers; the client could pursue a claim for error and possibly correction.

•  A solicitor discloses confidential information about a client; a claim could be made as a result of breaching confidentiality.

Need a quote?

Just fill out the quick quote form on our professional indemnity insurance page, or give our UK based sales team a call on 08081686868.