Professional indemnity insurance

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Cover for claims of mistakes, advice or negligence

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What is professional indemnity insurance?

Professional indemnity insurance, sometimes referred to as PI insurance, covers you in the event that your business damages the finances or reputation of a client.

A professional indemnity policy can allow you to recover losses from compensation claims and related legal fees.

Compensation can vary significantly, based on the type of claim that’s awarded as well as the severity of the individual circumstance. But having this cover in place can reduce the financial impact on your business.

The specific policy you’ll need will depend on factors such as your industry, the size of your business and the services you offer.

Is professional indemnity insurance required by law?

Professional indemnity insurance isn't usually a legal requirement.

However, businesses and self-employed professionals that provide advice, professional services, or handle sensitive information may choose to have it for protection.

It could be worth considering if your work could result in a client losing money or claiming they were negatively affected by your advice or services.

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What does professional indemnity insurance cover?

Professional indemnity insurance can help cover claims made against your business if a client says your work, advice, or services caused them financial loss or damage to their reputation.

To be covered, your policy usually needs to be active both when the work was carried out and when the claim is made.

Usually covered

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    Mistakes, errors, or negligence in your work or advice

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    Incorrect information or advice given to a client

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    Breaches of confidentiality

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    Copyright, trademark, or intellectual property infringement

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    Lost or damaged documents or data

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    Defamation claims, such as libel or slander

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    Legal defence costs and compensation payments

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    Claims linked to poor product design, specifications, or advice causing injury

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    Fraud or dishonesty committed by an employee

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    Claims made against your business by clients for financial loss

Not usually covered

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    Work completed before your policy started (unless retroactive cover is included)

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    Injury or damage caused to members of the public or their property — this is usually covered by public liability insurance

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    Employee illness or injury caused by their work — this is usually covered by employers’ liability insurance

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    Claims made after your policy has ended if you no longer have cover in place

Which professions commonly take out professional indemnity insurance?

Some professions may need professional indemnity insurance to meet industry regulations or join a professional body.

You may also find that clients require you to have professional indemnity insurance before signing a contract or starting work.

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Advice and consultancy

Businesses that provide professional advice or consultancy often choose professional indemnity insurance, including:

  • Management consultants

  • Business consultants

  • Accountants and financial advisers

  • Coaches, trainers, and educators.

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Creative and digital services

Professional indemnity insurance is also common among businesses that provide creative or digital services, including:

  • Marketing and PR agencies

  • Web and design agencies

  • Designers.

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Technical and specialist professions

Some technical and specialist professions may also choose this cover, including:

  • Architects and engineers

  • Chartered surveyors

  • Some construction professionals

  • Some medical professionals.

What affects the cost of professional indemnity insurance?

The cost of professional indemnity insurance varies from business to business. Your premium will usually depend on several factors, including:Start a quote
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The size of your business

Larger businesses may pay more for cover, as they often have more clients, projects, or employees.

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The industry you work in

Some professions and industries are considered higher risk than others, which can affect the price of your policy.

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The level of cover

The more cover you choose, the more you're likely to pay. Some professional bodies and regulators may also require members to hold a minimum level of cover.

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Your claims history

Previous claims can affect the cost of your insurance and may increase the premium you're offered.

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Your excess

Choosing a higher excess could reduce your premium, while a lower excess may increase the cost of cover.

A quick and easy way to find out how much professional indemnity insurance costs is to compare quotes with us.

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How much professional indemnity cover do I need?

While most professional indemnity insurance providers offer cover ranging from £50,000 to £5 million, how much cover you need is unique to you. You will have different risks and circumstances to cover, depending on the size and nature of your business.

The larger the business you own, the greater the level of cover you may require. If you have large amounts of product stock, you may want to cover them in case of faults. If you’re providing financial services, the advice and guidance you offer will hold another type of value.

Some professional bodies, regulators and businesses will require you to have a minimum amount of professional indemnity cover. So, check carefully to find out how much you’ll need.

If you’re unsure, it’s best to contact your industry body or client to ensure you have the minimum level of cover required.

How do I choose the right professional indemnity policy for me?

There are many things to think about when choosing the best professional indemnity policy for your business.

Your profession or business type

The amount of cover you need

Regulatory requirements

Excess amounts

Customer satisfaction

Amy Rootham

What our expert says...

“Professional indemnity insurance isn’t a legal requirement, but if you work in certain professions, you won’t be able to join some regulatory bodies or industry associations without it. These include the Chartered Institute of Taxation, Association of Chartered Certified Accountants and the Royal Institute of British Architects.

“Companies may want to see proof of professional indemnity cover, or that you’re a member of these sorts of associations.

“Having indemnity cover reassures potential partners that you’re less of a risk to work with, knowing you could cover the potential costs of a compensation claim.”

Amy Rootham, Insurance expert

What other types of business insurance might I need?

As well as professional indemnity insurance, you may need additional insurance for your business, such as:

  • Employers’ liability insurance – if your business has one employee or more, it's a legal requirement to have this insurance. It covers you if your employees are injured or become ill as a result of working for you.

  • Public liability insurance – covers your business if someone is injured on your business property, or if you damage someone else’s property while working.

  • Business interruption insurance – covers you for a period of loss of profits/sales if you’re unable to operate as a business in a situation out of your control (eg: natural disasters).

  • Business property and contents insurance – insures your equipment and facilities.

  • Product liability insurance – protects you if someone suffers an injury or damage from a product that you’ve produced, supplied or serviced.

What do I need to get a quote?

To get a professional indemnity insurance quote, you’ll need to tell us some basic information about your business.

Start a business insurance quote

Your profession

Your business details

Your business history

Any previous claims

Any additional cover

Start a business insurance quote

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FAQs

Do I need professional indemnity insurance if working from home?

Yes, you may need professional indemnity insurance if you work from home and provide advice, services or designs for your clients.

You almost certainly won’t be covered for professional indemnity under your home insurance policy.

What kind of claims does professional indemnity insurance cover against?

Here are some examples of the type of slip-ups that could lead to a claim:

  • You accidentally reveal sensitive information about a client by forwarding an email to the wrong person.

  • You print an error on an advertising leaflet that a client sends out to customers.

  • You breach copyright by using a stock photo on your website without permission.

  • You leave a laptop on a train that contains sensitive client data such as names, addresses or credit card information.

What is a retroactive date on professional indemnity insurance?

This is the date from when your professional indemnity cover starts and has since continued uninterrupted.

It’s called retroactive because your provider has agreed to cover you from a date earlier than the date you first took out your cover. This can be useful if, for example, you take out your policy after you start work on a project you need cover for.

If you switch providers, make sure your new policy has a retroactive date you’re happy with so that you can remain protected for claims against work that was done in the past (within the covered period). Otherwise you will no longer be covered for any past work.

What is the difference between professional indemnity insurance and public liability?

Professional indemnity insurance protects you against compensation owed to a client.

Public liability insurance protects you against claims if a member of the public is injured or their property damaged because of your business’ activities.

Is professional indemnity insurance tax deductible?

Yes, professional indemnity insurance is classified as an ‘allowable expense’, which means it’s tax deductible. Other types of business insurance are also tax deductible.

Can I take out a short-term professional indemnity insurance policy?

In theory you can, but most providers advise against this and some only offer policies lasting for a minimum of 12 months.

Professional indemnity insurance works on a ‘claims-made’ basis. This means there must be an active policy in place for you to make a claim.

Suppose you had a short-term contract that ran from January to July, and you only had cover for the same period. If you’re sued by a client after a costly error comes to light in September, you won’t be covered.

How do I get ‘proof of cover’ so I can secure a contract?

When you take out professional indemnity insurance, your provider will usually email your policy documents to you straight away. Some clients will ask to see proof of cover before they hire you. You can show them your insurance certificate outlining the level of insurance you have for the type of work they’re asking you to do.

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Amy Rootham
Reviewed 10 Jun 2026 by Amy Rootham Insurance expert

Amy helps make sure you get the best value when choosing insurance. Thanks to more than four years’ experience at Compare the Market, she understands what people look for, working closely with insurance providers to offer you deals and services that are fair, easy to understand and right for your needs.

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1 Based on the % of respondents reporting Compare the Market is their preferred brand in the last 12 months vs. other leading PCWs. Source: Savanta BrandVue Financial Services, National Representative Survey of 12,257 respondents (June 2026)​