Professional indemnity insurance

Professional indemnity insurance can be an important cover for a range of businesses, from accountants and architects to surveyors and consultants, who must have professional indemnity cover in order to operate legally. It’s particularly popular with businesses that provide advice or a professional service because it can cover you if your work leads to a financial loss for your client. Some client contracts will require that you have a certain level of professional indemnity cover.

Even if you’ve done nothing wrong, the cost of defending yourself against claims for negligence or mistakes that leave your client out of pocket can be very high. You might need professional indemnity insurance if you:

• provide a service
• give advice
• handle sensitive data

Read more to help you decide whether you need professional indemnity cover.

You’ll need to think about the type of projects you work on, and whether your clients, regulator or professional body ask you to have a minimum level of cover. You can usually choose between £50,000 and £5 million of professional indemnity insurance.

Your clients may tell you the cover amount they need you to have in place. If they don’t, it’s always worth checking before you take on the work.

If you need to change your cover level, it’s important to let us know. Underestimating the cover you need can lead to your claim not being paid.

When you take out your professional indemnity cover, make sure you check any exclusions on your policy, and whether it includes legal expenses cover. With Simply Business, you can check the details of your policy wording before you buy.

Read more about deciding your cover level.

Even if professional indemnity insurance isn’t compulsory for your business, you may decide that it’s an important insurance to have.

It can pay claims made against you for negligence or making a mistake in your work. This means that it’s a particularly important insurance for any business that gives advice, provides a professional service, and/or handles client data and intellectual property.

Professional indemnity insurance is mandatory for members of some professional bodies and is required by some regulators. This means it’s effectively compulsory for some professions. This includes solicitors, financial advisers, accountants, architects and some healthcare professionals.

When you’re figuring out whether professional indemnity insurance is compulsory for your business, check the guidelines from your regulator and your professional body and also check your client contracts.

Professional indemnity insurance isn’t a legal requirement. But regulators and professional bodies may require your business to have professional indemnity insurance, so you should check whether it’s compulsory. As an example, professions like solicitors, accountants and architects may need it.

It’s important to give accurate information when building your quote to make sure you’re getting the right cover for your business. Here are some of the questions you’ll be asked when you buy professional indemnity insurance online:

• are you a sole trader or limited company?
• does your business deal with members of the public?
• do you work with clients or customers?
• do you handle data or intellectual property?

If you’re not sure about the details you need to give, you can always call us on 0333 014 6683 and someone from our UK-based team of experts will help you with your quote.

Freelance professional indemnity insurance is an important cover for copywriters, graphic designers, photographers, and other freelancers.

It can cover designers if they unknowingly use another business’s intellectual property when creating designs, for example, which leads to a financial loss for their client.

Professional indemnity insurance can cover other disputes too, paying out to fix mistakes or compensate your client.

Public liability insurance covers compensation claims from the public if someone is injured or loses out financially and blames your business. Professional indemnity insurance covers claims from clients who lose out financially because of a mistake you made or advice you gave.

Public liability insurance at a glance

• if your work causes injury or property damage
• covers compensation payouts and legal costs
• even covers damage to third party property
• covers you for past mistakes
• some clients or trade bodies may require a certain level of public liability cover

Professional indemnity insurance at a glance

• if a client decides your work or advice is inadequate
• covers you in case you need to fix your mistake at your own expense
• protects you against financial loss while you’re defending or settling a claim
• a key consideration for businesses that provide advice or services
• you may be able to backdate your policy start date to cover you for previous work

With us, you can compare professional indemnity and public liability insurance quotes at the same time, including them both in one policy.

Read more about the difference between professional indemnity and public liability.

Businesses can deduct ‘allowable expenses’ when calculating their taxable profit and business insurance is an allowable expense. This means you can deduct the cost of professional indemnity insurance when calculating your taxable profit. Make sure you keep a record of your income and expenses for HMRC.

Read more about whether professional indemnity insurance is tax deductible.

Make sure you’re covered for the services you provide:

• Business insurance
• Public liability insurance
• Employers’ liability insurance
• Commercial insurance
• Product liability insurance
• Personal accident insurance
• Business legal protection insurance
• View all business insurance covers

Other types of insurance

• Limited company insurance
• Self-employed insurance
• Freelance insurance
• Consultant insurance
• Contractors insurance
• Sole trader insurance