Who needs professional indemnity insurance?

Professional Indemnity Guide

Who needs professional indemnity?

tick
Consider whether you provide a service or hold client data that you can be held accountable for.
tick
There are traditional and non-traditional professions that now purchase professional indemnity.
tick
Talk to a specialist insurance broker to see whether your business needs professional indemnity.

Who needs professional indemnity?

tick
Consider whether you provide a service or hold client data that you can be held accountable for.
tick
There are traditional and non-traditional professions that now purchase professional indemnity.
tick
Talk to a specialist insurance broker to see whether your business needs professional indemnity.

By Simon Taylor (ACII) - Published: 26 June 2021

 

Who needs professional indemnity insurance?

Professional indemnity insurance is not a legal requirement in the UK for most professions, but can be purchased for muliple reasons. Below we take a closer look at the main reasons why businesses may need to purchase the cover:

  • Firstly, some regulators and/or professional bodies require companies or individuals to hold minimum amounts of professional indemnity insurance to operate and/or continue their professional membership.
  • Secondly, businesses that offer advice, provide a professional service or handle client data or intellectual property would benefit from having cover to protect against third-party claimaints seeking financial compensation.
  • Thirdly, other companies may require professional indemnity to win new contracts and prove to potential customers they have the financial means to offer compensation should you breach the terms of your contract.


    Does our business need professional indemnity insurance?

    Many businesses do not appreciate the need to purchase professional indemnity insurance, especially if there is not a legal requirement or if offering services is only part of their business.

    If you are unsure whether you need professional indemnity insurance, please contact us on 0345 625 0711 or arrange a call back to discuss your needs.


    Which professions typically require professional indemnity insurance?

    Traditional professions include: Accountants; Architects; Engineers; Financial Planners; Solicitors; and Surveyors. However, over the last 20 years there has been a greater emphasis on non-traditional service providers purchasing professional indemnity.

    Non-traditional services include: Advertising; Advisory; Consultancy; Contractors; Designers; Financial Services; Inspection Services; Intermediary Services; Technology / Software; Marketing / Media; Project Management; Specification; Testing; Training; Translation; and Valuations.

    It is common practice for counterparties to require professional service providers to purchase minimum levels of professional indemnity within their contracts.


    Why you should consider professional indemnity insurance?

    Professional indemnity insurance can offer a wide range of protections against negligence, breach of contract, defamation, breach of privacy and intellectual property infringement should the worst happen.

    Professionals need to ensure they have sufficient business insurance to guard against claims for financial compensation. Professional indemnity insurance means they can offer their services with the knowledge they have access to legal and financial support.

    For more information read: What is professional indemnity insurance? Explained


    This guide is for information purposes and based on sources which we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.