Professional indemnity insurance.
What is professional indemnity insurance for?
- Professional indemnity insurance protects you from
any legal action taken against you as a result of offering your
professional opinion. This cover is suitable for professions
- Business consultants
- Financial Advisors
- IT Consultants
How to get professional indemnity insurance
- In order to take out professional indemnity
insurance, call our team of advisors on 0800 107 4885 and they will
work to find the best policy they can for you.
- Have the following information to hand:
- Retroactive date
- Annual turnover
- Number of fee earners
When you take out professional indemnity insurance, the insurer
will cover you for as long as you have had the cover in place, even
if it had previously been held with other insurers. However, if
there is a gap in the period of cover, they will not pay out for
any time before that break. This is why the retroactive date is
highly important as it identifies how long you have been covered
for and should be carried forward to the new policy.
If this is your first professional indemnity insurance policy,
you don’t need to worry about this.
Specific details about your trade
- There will be different questions that you
will need to answer depending on what you do as your profession. If
you are an IT consultant for example, insurers may ask you if you
work on any aviation software or life support machines. Your
premiums could be affected by the nature of the work you
What does professional indemnity insurance protect?
- Professional indemnity will cover any legal
action levelled against you for incidents including:
- Accidental breach of confidentiality
- Inadvertent infringement of intellectual property
- Replacing lost or damaged documents
- Errors and omissions
Some policies will also cover you for breaches of other civil
liabilities including breach of contract or warranty.
What does it not protect?
You can not be covered for:
- Breach of any legal liability
- Loss of reputation
- Loss of future contracts
- Criminal prosecution
Levels of cover
- The level of professional indemnity cover
available is between £50,000 and £5m. Larger amounts, although less
common, are also available if required. The most popular amount
taken out is £1m of cover.
- Professional indemnity can be taken out as part
of a larger package for your business or can be taken as a
Thomas is a director for Parker, Jones & Associates, an
accountancy firm which is in the process of auditing Pharma Corp, a
high profile pharmaceuticals company. Thomas emails some additional
financial files over to a fellow director, Frederick Parker, to
Once it is sent, he glances up and notices that in the ‘to’
line, instead of ‘Frederick Parker’, he has accidentally sent it on
to ‘Fred Parks’, a financial journalist who Thomas met at an
industry event last year.
Pharma Corp is furious with the accidental leak and as a result
sues Parker & Associates for breach of confidentiality.
If Parker, Jones & Associates has professional indemnity in
place, it would be covered for anything it is liable to pay as a
result of the lawsuit resulting in the accidental breach of