Professional Indemnity Insurance Quote

Your business may need to consider other types of insurance, depending on the risks involved in your work, the industry you are in and your personal business circumstances.

For example, if you employ non-family members in the UK, you’ll need to take out employers’ liability insurance. You could face a fine if you aren’t properly covered.

Some professional bodies require their members to take out specific types of insurance. Or you may find that clients request that you have a certain level of public liability insurance.

Every business is different. For specific advice related to your business, you may want to talk to an expert or your insurer.

No, professional indemnity insurance is not legally required for businesses trading in the UK.

However, some industry regulators insist that you have PI insurance. This includes solicitors, accountants, architects, chartered surveyors, financial advisers, and certain healthcare professionals. If you’re unsure, you should consult the professional body for your industry.

The only legal requirement for businesses in the UK when it comes to insurance is employers’ liability insurance. If you employ anyone outside your immediate family who is based in the UK, you need to have this cover or you could face a £2,500 fine for each day you’re not covered.

As it is classed as an ‘allowable expense’, professional indemnity insurance is tax deductible. The cost of PI insurance can be deducted from your income when working out your taxable profits for self-assessment or your tax return. You should always seek professional advice if you are unsure about how this works.

If a client makes a negligence claim against you and you think you may have to claim on your professional indemnity insurance, you should contact your insurer straight away.

Insurers can reject your claim if you don’t give them enough notice, so it’s important to let them know what’s happening as soon as you can. You can usually contact them by email, via an online form, or over the phone.

If you think a claim could be made against you but you have not yet received notice of one, it’s still worth giving your insurer a heads-up. They may be able to help you settle the issue without needing to go through the claims process, or else can advise you on your next steps.

Professional indemnity insurance typically covers compensation related to claims made against you or your business for providing advice or services that led to financial loss or reputational damage.

On the other hand, public liability insurance covers third parties (such as clients or members of the public) if they get injured, die, or their property is lost or damaged because of your business activities. This includes work that your employees have completed, if you employ others.

In short, professional indemnity insurance covers financial or reputational loss suffered by clients as a result of your services. Public liability insurance covers injury or death, or loss or damage to property, incurred by third parties, including both your clients and members of the public.

» MORE: What is public liability insurance?

You may need professional indemnity insurance as a sole trader. It all depends on the nature of your business. For example, if you are a self-employed consultant registered as a sole trader, you may consider PI insurance because of the type of work you do.

Similarly, self-employed accountants or architects will need PI insurance because the relevant professional bodies of these industries require it. This would be the same whether you were a sole trader or ran your own architecture firm as a limited company.

In summary, whether you need professional indemnity insurance depends on what you do rather than how your business is structured.

» MORE: Should I register as a sole trader or a limited company?

Whether you need professional indemnity insurance when working from home depends on the nature of your business rather than where you work.

If you work as a consultant or accountant for example, the professional body for your industry requires you to have PI insurance – whether you work in an office or at home.

If clients come to you for your knowledge, skills or professional opinion, even If you’re not required to have it by your industry’s regulator, it may be something to consider whether or not your business needs to be covered by a PI policy.

For more information and advice tailored to your business, check with your insurer.

Although it may seem similar, Directors’ and Officers’ insurance is different to professional indemnity insurance.

Directors’ and Officers’ insurance covers claims against key managers of your business for committing a ‘wrongful act’. Such acts include breaches of trust and duty, neglect, misleading of clients and wrongful trading. This type of insurance covers specific individuals against claims made by investors, shareholders, regulators and creditors.

On the other hand, professional indemnity insurance covers claims made by clients who feel they have suffered financial or reputational loss as a result of your work, albeit unintentionally. This type of insurance covers claims made against your business as a whole or against individuals because of their work.

» MORE: What is directors and officers insurance?

If you are required to have PI insurance by your profession’s regulatory body but you are unable to secure an adequate policy, you should contact your professional body for advice. There may be procedures in place to help you get another policy or cover you until you are insured.

You may not be allowed to trade without adequate PI insurance in certain professions, so you should seek advice from your profession’s regulators if you think you may have a problem getting insurance.

Yes, professional indemnity insurance can cover claims made against your business for work your employees have done. You should inform your insurer of how many employees you have, so they can be included on your policy.

Usually, PI policies do not cover you for death or injury. However, this type of insurance may cover death or injury only if you were found to have been negligent and breached your ‘duty of care’ while at work.

However, if a third party was accidentally injured at your workplace and there was no professional negligence involved, this could be covered under a public liability insurance policy instead.