What is Professional Indemnity Insurance?

  1. Home
  2. Knowledge Base
  3. Starting a company
  4. What is Professional Indemnity Insurance?

What is Professional Indemnity Insurance?

Professional indemnity insurance (PI insurance) protects you if your client suffers a financial loss because of your work for them. Everybody makes mistakes sometimes, but even the smallest of mistakes can have larger repercussions.

Do I need professional indemnity insurance?

Even if you’ve not done anything wrong, the cost of defending yourself against any claims made against you for negligence or mistakes could be expensive. Professional indemnity insurance can be beneficial to a variety of businesses from contractors and consultants, to accountants.

You’ll need professional indemnity insurance if:

  • Your business gives advice
  • Offers professional services
  • Handles client data or intellectual property

Some professional membership bodies and regulators might even require you to have it.

What does it cover?

PI insurance can cover you if a customer or client loses money as a result of negligence or your services. PI insurance can cover the cost of legal fees and compensation payments, as the compensation will often consider the financial loss that’s being claimed for.

For example, if you accidentally send an email containing confidential information to the wrong person and the company sues you for breach of confidentiality, professional indemnity insurance can help you recover any costs.

Professional indemnity covers:

  • Professional negligence or breach of duty of care (making a mistake in your work or providing bad advice)
  • Unintentional copyright infringement
  • Unintentional breach of confidentiality (sharing information that’s confidential or sensitive without consent)
  • Loss of data or documents
  • Defamation or libel (a false statement that is damaging to a company’s reputation)

How much cover do I need?

It’s always worth asking your customers and clients how much cover they need you to have, to ensure you’re protected in the unlikely event that something goes wrong.

Making sure you have the right level of cover before you start a job is crucial. If you need to change your level of cover, let your insurance provider know as soon as possible. Underestimating the amount of cover you need could mean that any claims you make might not be paid.

Can we help?

We want to open up the law to everyone. Explaining it clearly is part of that, but we also find ways to make everyday legal services cheaper and easier.

If you’d like to start a business or register a limited company, we can help you. We can start your company, handle your PAYE and VAT registration, and plenty more. In fact, we’ve managed to make our cheapest company-formation package cost less than going direct to Companies House. Visit our company formation webpage, or call us on 0345 122 8103 if you need advice.

Can we help?

We want to open up the law to everyone. Explaining it clearly is part of that, but we also find ways to make everyday legal services cheaper and easier.

If you’d like to set up a business or register a limited company, we can help you. In fact, we’ve managed to make our cheapest company formations cost less than going direct to Companies House. We can also help with accounting, payroll and tax services or a central London address – there’s a month’s free trial, and you can cancel any time. If that all sounds a bit daunting, don’t worry. Using a formation agent (like us) to do the legwork could actually save you money. Visit our company formation webpage, or call us on 0345 122 8103 if you need advice.

Can we help?

We want to open up the law to everyone. Explaining it clearly is part of that, but we also find ways to make everyday legal services easier and more affordable.

Perhaps you’re thinking about how to take care of things if the worst happens, so there’s less stress for the people you love? We can help with willsliving willspower of attorney and more. Or call us on 0345 122 8103 if you need advice.

Can we help?

We want to open up the law to everyone. Explaining it clearly is part of that, but we also find ways to make everyday legal services cheaper and easier.

If you’re buying or selling a property, we can help you. In fact, we have everything you need to get the conveyancing process done and dusted online. Have a look at our conveyancing webpage, or call us on 0345 122 8103 if you need advice.

Was this article helpful?

Related Articles

Get helpful tips and info from our newsletter!

Stay in touch, get our newsletter

Left Menu Icon
Right Menu Icon
Skip to content