Professional Indemnity Insurance
Compare professional indemnity insurance quotes from the leading UK carriers
What is professional indemnity insurance?
Professional indemnity insurance, also known as errors and omissions, is a business insurance policy designed to protect professionals from financial losses whilst providing a service or advice. PI insurance will provide coverage for the legal costs associated with defending claims and provide for damages awarded by the courts.
We can compare professional indemnity insurance cover to ensure you are adequately protected. As insurance brokers we can provide a fully advised service to give you the confidence your business insurance will respond when needed. PI insurance quotes can start from as little as £332 annually for a limit of £1 million, however premiums can increase into the tens of thousands of pounds.
Why professional indemnity insurance is important?
If a client feels you haven’t delivered under the terms of your agreed contract or have been negligent, in an increasingly litigious society they may consider seeking financial recompense through the courts. Businesses need to ensure they have sufficient cover to guard against claims for financial compensation. Professional indemnity cover allows your business to trade with the knowledge you have access to legal and financial support if required.
Additionally, a professional indemnity policy can enhance your reputation and increase client trust. It reassures clients that they will be compensated if they suffer a loss due to your advice or service. While, for certain professional bodies, holding PI cover is mandatory to comply with regulatory, industry body, or licensing requirements.
Compare professional indemnity insurance quotes from the leading UK insurers
PI cover can start from £332 annually for a limit of £1 millionWhat does professional indemnity insurance cover?
Negligence
Mistakes, errors, omissions, or oversights in the services provided. Failure to meet industry standards or expectations. Incorrect advice or guidance given to clients.
Breach of Contract
Failing to perform duties as agreed upon in the contract with the client, leading to financial loss or damage. Typically a lower burden of proof compared with negligence.
Libel and Slander
Otherwise known as defamation, whereby the act of making false statements harms the reputation of an individual or organisation who then makes a compensation claim.
IP Infringement
Unintentionally infringing on the intellectual property rights of others through the services provided will typically trigger a claim under a policy.
Breach of Confidentiality
Unintentional sharing or misuse of confidential information belonging to a client or third party can cause significant financial loss to the third-party.
Why businesses need professional indemnity insurance?
Legal requirement
In some professions, having PII is a legal requirement or a condition for membership in industry bodies or regulatory agencies. For example, solicitors in the UK must have PII to practice law.
Client contracts
Many clients require proof of PII before engaging a professional's services, as it assures them they can cover any potential claims for mistakes, errors, omissions, or negligence, whereby they suffer a financial loss.
Vicarious liability
Many businesses do not appreciate the need for professional indemnity cover - this can occur when there is not a legal or regulatory body requirement. It's important to remember you can be held vicariously liable for the actions of your employees and sub-contractors, which means you could be held responsible even if you weren't directly at fault. Underinsurance is common and that means businesses will face having to pay legal costs or put the company into insolvency.
How much cover?
The amount of cover you decide to take out will be determined by a number a factors, including whether you are required to meet any contractual or regulatory requirements. The second most important determining factors are the size of your business and the size of the contracts you undertake. We ask our clients to consider, if you fail to deliver your services or were negligent, how much could your client's lose financially, including consequential and indirect losses? It's then worth considering that defence costs can typically amount to half the damages awarded if the dispute is rebuffed through the courts.
Professional indemnity and public liability insurance
Both covers will pay legal defence costs and damages to compensate another party, however the circumstances covered by the different policies are different. Public liability insurance will protect against claims arising from injury or property damage of persons other than your employees in the course of your business activities. Whereas, professional indemnity will help protect your company against the failure to exercise reasonable skill and care when providing a service to a client.
Discounted PI premiums available to SME's and mid-sized corporations
Talk to one of our PI brokers by booking a video callUnderwriting process
1. Representation - to access the market you'll need to use an insurance broker. We are experts that can help you decide what type and level of cover you need, and recommend a suitable policy that meets your needs.
2. Right approach - quotes can be provided on a 'Statement of Fact' basis, or we will ask you to complete a proposal form depending upon the industry you work and the size of your business.
3. Correct disclosures - all statements disclosed, statement of facts, should be full, true and accurate and given after undertaking a reasonable search. Deliberate or reckless failures to present the risk fairly could mean part or all of your claim is declined.
4. Business activites - all PI policies will refer to a definition of professional service. It's important this definition is broad enough to capture your activities and sufficient information has been disclosed to ensure you are covered.
5. Terms and conditions - cover offered from the market can vary - the triggers of a policy, the insuring clauses, definitions, conditions and exclusions can be different. Unless you are an expert it can be hard to distinguish between the different policies.
6. Rated security - the insurers reputation for paying claims is an important consideration. If you need to rely on your policy, you don't want the uncertainty that cover hasn't been granted due to the insurer's insolvency.
Rating factors and key considerations
Below we explore the key factors that impact the availability of professional indmenity and the premium calculations. It's worth noting that annual premiums can vary significantly depending upon your business activities and services provided. Below we've identifed the key factors:
Turnover
Is an important factor given it shows the amount services you provide to your clients. Typically, your most recently reported turnover. Obviously, the more work you undertake the increased risk exposure to errors, omissions, and subsequent claims for damages. Additionally, insurers will typically want to understand the nature and size of your contracts - which provides an indication to risk of future claims, with larger scale projects typically carrying increased preiumms.
Services
What service you provide to you clients is a key rating factor because different services will have higher or lower degree of risk of future claims. Some industries such as financial services are more prone to litigation and will carry significantly higher costs. It is important to note that your Policy Schedule correctly reflects your business activities because if you provide services that are not associated then you could find yourself without cover.
Experience
In addition to qualifications will acts as an indicator of your ability to: 1) provide accurate advice or services; 2) match advice and services to the client's needs; 3) manage client expectations; 4) recognise and mitigate client dissatisfaction. The number of years you have successfully traded without claims will mean a discount to your premium. An extended period of successful trading without any circumstances means you are likely to obtain a further discount.
Contract management
Contractual conditions provide the first line of defence against PI claims. Therefore, insurers may require you maintain certain contractual conditions. Your premium and availability of cover can be impacted if your contracts do not maintain: (1) a description of services; (2) limitations of liability; and (3) a consequential loss exclusion. Lack of standard contracts that mitigate your risk and legal vetting can indicate a reduced level of risk management and appreciation for the liabilities being accepted.
Law and jurisdiction
Most insurers will not provide cover to claims for compensation against you under USA law and jurisdiction unless you specifically negotiate the coverage extension. If you contract with US clients, it is recommended you do so under UK law to keep your costs lower. If disputes under contract are agreed to be held in a US court this will need to be declared to your insurer and will have a significant impact on the premium, due to its litigious nature and expensive awards.
Claims history
The number of years you have successfully traded without claims will mean a discount to your premium. An extended period of successful trading without any circumstances means you will obtain favourable terms. Whereas, high claims severity or frequency, with a lack of remedial action can indicate a lack of quality risk management and systemic issues. It is recommended that any claims are described in detail - which means identifying whether the claim is still open, how much as been paid to date, and what is the current reserve.
When applying for coverage:
Information that identifies how your business represents a better risk than your industry peers can increase the availability of cover and reduce your cost. Insurers will consider professional indemnity discounts where evidence of compliance procedures, risks assessments and/or complaints register demonstrate your risk adverse nature and high level of due diligence.
Either arrange a call back or complete our digital onboarding process to obtain your PI quote.
All the insurers we work with are overseen by the Prudential Regulation Authority and have an AM Best rating of A+.
Frequently asked questions
Can you provide some PI claim examples?
1) An architect specifies inadequate materials for a construction project and a client seeks a claim for compensation for £250,000 to rebuild.
2) A software developer accidentally corrupts files on a client’s system and seeks to claim for a financial loss of £700,000.
3) An advertising agency releases on online campaign with incorrect information and the client claims £2,000,000 for damage to reputation.
Is there a difference between a 'negligence' and 'civil liability' policy?
Typically, there are commonly two types of PI policies available: (1) A 'Negligence' policy which provides cover for breach of duty of care by way of negligent act, error or omission - there is no coverage for claims based on breach of contract or statute law; and (2) 'Civil Liability Insurance' policy which does not limit cover as to the nature of the wrongdoing - the cover may include breach of duty of trust, conflicts of interest, breach of statute law and defamation. These may not necessarily arise from negligence and therefore may not be covered under a negligence indemnity policy.
Can you provide solicitors professional indemnity insurance?
Please contact us for a proposal form to complete. Whether you provide legal services to individuals or institutional clients, across a range of civil, commercial or criminal cases you are required to purchase PI Insurance. Common solicitors PII claims arise from: negligent act, error or ommission, imporper advice, failure to define scope of services, failure to record instructions, breach of confidentiality, failure of diary system or failure to identify conflicts.
What are the key features of a PI policy?
Claims-made Basis: PI policies typically operates on a claims-made basis, meaning it covers claims made during the policy period, regardless of when the actual incident occurred, as long as it was after the retroactive date (if applicable).
Retroactive Date: Some policies include a retroactive date, covering incidents that occurred after this date, provided the claim is made during the policy period. New policies might exclude previous known claims or circumstances that could give rise to a claim.
What does professional indemnity insurance typically exclude?
Cover will typically exclude guarantees, warranties, liquidated damages (promise to pay if a service is not performed), or assume a third party's liability. Each insurer's professional indemnity policy will have different terms and conditions, therefore its worth considering the exclusions applied to the proposed cover. It's also worth considering whether your services could ultimately cause bodily injury or property damage - for example heath and safety consultancies should consider cover that does not contain an absolute exclusion. Different professions may require specific coverage tailored to their unique risks. For example, IT consultants might need more extensive coverage for data breaches and cyber liability, while architects and engineers may need coverage that includes the physical impacts of design errors.
Related articles and guides
Indemnity insurance is an important concept, providing a safeguard against financial loss or liability. Its primary purpose is to provide indemnification, or compensate, an insured party for losses or damages they have suffered, under specific terms and conditions of the insurance contract.
The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.