Also known as: Professional Indemnity Policy
Cover for claims arising from professional advice, services or designs that cause a client financial loss.
Professional Indemnity covers legal liability arising from an error, omission or negligent act in the professional services you provide. Where general liability responds to physical injury and property damage, professional indemnity responds to financial loss caused by advice or work product. It is written on a claims-made basis, meaning the policy in force when the claim is notified responds — not the one in force when the work was done.
Consultants, architects, engineers, IT service providers, accountants, doctors and healthcare professionals, lawyers, designers, marketing agencies and recruitment firms. Any business whose product is advice, design or professional judgement. Client contracts increasingly specify minimum PI limits, particularly with corporate and public sector clients.
Limits commonly range from twenty-five lakh for small consultancies to twenty-five crore or more for large engineering and technology firms. Sizing reflects contract values, client profile and the financial consequence of an error rather than the size of your own business.
The difference between a policy that responds and one that disappoints usually sits in details that are easy to overlook at purchase.
Not sure which combination fits your business?
Speak to an AdviserThe policy responds to claims notified during its period, regardless of when the work was performed. If cover lapses, claims relating to past work are no longer covered — which is why continuity matters more here than on other policies.
The earliest date of work covered by the policy. Work performed before that date is excluded, so maintaining an early retroactive date through renewals is important.
Contractual limitations are not always enforceable, and defence costs arise regardless of whether a claim ultimately succeeds. Many clients also require PI as a contractual condition.
Usually your liability for sub-contracted work is covered, but the sub-contractor’s own liability is not. Confirming their own cover is standard practice.
Cover continuing after the business stops trading, protecting against claims arising later from earlier work. Often required for several years after closure.
Substantially yes. The terms are used interchangeably, with E&O more common in technology and financial services and PI more common elsewhere.