Advice, design and professional services
Professional Indemnity Insurance
for established UK companies and professional firms
Cover for the claim that says your advice, design or work was wrong, and for the cost of arguing about it, triggered by when the claim arrives rather than when you did the job.
- Consultancies, agencies and professional firms
- Design, advice and specification
- Defence costs as well as damages
- FCA authorised and regulated
Quick answerProfessional indemnity insurance covers the cost of putting right advice, design or work that was wrong, and the legal costs of defending the allegation. It answers claims made while the policy is running rather than work done while it is running, which is why telling your insurer about a problem before renewal matters more than almost anything else on this page.
At a glance
Professional Indemnity Insurance at a Glance
Short answers to what UK firms ask before they compare anything.
| Question | Quick answer |
|---|---|
| What does it actually pay for? | Putting right advice, design or work that was wrong, the loss it caused your client, and the cost of defending the allegation. |
| When does it respond? | When the claim is made against you, not when you did the work. That is the whole product in one sentence. |
| Is it compulsory? | For some regulated professions, with a minimum set by their regulator. For everyone else it comes from client contracts. |
| What should I check first? | Your retroactive date. Work done before it is not covered at all, whatever else the policy says. |
| What is the commonest mistake? | Not telling the insurer about a problem before the policy expires. It is free, and it decides whether you are covered. |
| Does it cover my own re-work? | Rarely. Redoing your own job is usually your cost. The loss it caused somebody else is the insured part. |
| What happens if I stop trading? | Nothing, unless you buy run-off. The cover stops answering the day it lapses, whatever year the work was done. |
| What moves the price? | Fee income, what you advise on, your limit, your claims record and how far back cover reaches. |
The basics
What Is Professional Indemnity Insurance?
Professional indemnity insurance answers the claim that says your advice, your design or your work was wrong and cost somebody money. It pays what you are legally liable for, and it pays to defend you, which on a disputed claim is often a substantial part of the total.
It is bought by firms that sell judgement rather than goods: consultancies, agencies, designers, accountants, surveyors and technology companies. It often sits inside a commercial combined policy alongside the liability and property sections, but the way it is triggered is completely different from everything around it, and that difference is what this page is mostly about.
What a good policy has to do
- Defence costs as well as damages, which is often the bigger half
- A retroactive date that reaches back over the work you have already delivered
- A limit set against what your client contracts actually demand
- Run-off available when the firm stops, so late claims still land somewhere
Why it sits apart
Triggered differently
- Professional indemnityThe date the claim is madeClaims-made
- Public liabilityThe date the injury or damage happenedOccurrence
- Employers liabilityThe date of the exposureOccurrence
- PropertyThe date of the damageOccurrence
- Cyber, liability halfThe date the claim is madeClaims-made
How it works
How Does Professional Indemnity Insurance Work?
It responds to claims first made against you during the policy year. The retroactive date on your schedule sets how far back your past work is covered. Together those two dates decide whether today’s policy reaches a job you finished four years ago.
The trigger is the claim, not the job
A policy that expired last month will not answer a letter that arrives tomorrow about work you did while it was running. Only the policy live on the day the claim is made is on risk.
The retroactive date is the other half
Printed on your schedule. Work carried out before it is outside the cover however good the rest of the policy is. A gap in cover is worse than it looks, because insurers commonly answer a gap by setting the date at the new inception, which puts your past work outside too.
Run-off keeps it alive after you stop
Because the trigger is the claim, letting cover lapse when the firm winds down leaves late claims with nothing to attach to. The regulators that mandate it require six years, and several of the periods you can be sued over run longer than that. It is bought at the moment a firm has stopped earning fees, which is exactly why it gets skipped.
Comparing two quotes without comparing their retroactive dates is comparing nothing. A notably cheap renewal is sometimes cheap because it starts cover from inception, leaving every year of past work outside. One UK accountancy body warns its members about exactly that. It is printed on the schedule, and it is the line firms do not read.
What it covers
What Does Professional Indemnity Insurance Cover?
Claims that your advice, design or work was wrong and caused loss, together with the cost of defending them. Most wordings add loss of client documents, unintentional defamation and breach of confidence. Cover for dishonest employees is an extension you have to ask for.
Negligent advice and design
The recommendation, specification or calculation that was wrong, and the loss your client suffered relying on it.
Defence costs
The lawyers, experts and investigation needed to argue the claim, whether or not you were ever at fault. On a disputed claim this is often a substantial part of the total.
Breach of professional duty
Missed deadlines, work below the standard your appointment set, and failures to raise something you should have.
Loss of documents and data
The cost of reconstituting client records you were holding. Standard on most wordings, but usually to a sub-limit well below the headline figure.
Defamation and confidentiality
Unintentional libel or slander and breach of confidence, both commonly included for agencies.
Dishonesty of your own staff
An extension rather than a given. Several current UK wordings exclude dishonesty and fraud outright, with no carve-out for the innocent firm, so ask for it in writing if you need it.
Where the wording changes by sector
Technology firms
A technology wording names breach of contract and service levels as insured perils where a general one may not. See technology company insurance.
Design and build
Where you carry design as well as delivery, this is what reaches the drawing: construction company insurance.
Cyber alongside
Data breaches are usually a cyber question, and many general wordings exclude them outright: cyber insurance.
Exclusions
What Isn’t Covered by Professional Indemnity Insurance?
It will not pay to redo your own work, it will not reach a problem you already knew about, and injury or property damage belongs to the liability sections. Wordings vary a great deal, so read your own schedule.
Redoing your own work
The fee you write off and the time your team spends putting the job right are normally yours. What is insured is the loss it caused somebody else.
Anything you already knew about
A problem you were aware of before cover was agreed is excluded by the new policy. That is the other half of the notification trap.
Injury and property damage
Someone hurt or something broken belongs to public liability insurance, triggered by the event rather than by the claim. The difference is set out in our public versus employers liability guide.
Fines and penalties
Regulatory penalties are commonly excluded outright, even where the cyber section of the same package treats them differently.
Guarantees you gave
A promise that the result would be fit for a particular purpose goes beyond reasonable skill and care, and wordings commonly exclude the excess.
Data protection claims
Several general wordings exclude breach of data protection law by name, which surprises firms assuming the indemnity section covers a breach.
The exclusion firms trip over is the one about prior knowledge. It is not aimed at concealment. It simply means each policy insures the future, so the moment you become aware something may be wrong, the only policy that can help you is the one you are holding right now.
Professions
Which Firms Buy Professional Indemnity?
Technology and software companies, engineering firms, construction and design businesses, consultancies, architects and surveyors, accountants and financial services firms, recruiters, and marketing, media and creative agencies.
Technology and software
Where the claim names a clause rather than an act of carelessness, so the wording matters more than the limit.
See technology insuranceEngineering companies
Specification, calculation and design responsibility taken under an appointment.
See engineering insuranceConstruction and design businesses
Design and build work, where defects surface slowly and long after completion.
See construction insuranceManagement and business consultancies
Advice a client acted on, where the loss is financial and there is nothing physical to point at.
See commercial combinedArchitects and surveyors
Both regulated, both with a minimum set for them, and the surveyors minimum is the one that genuinely bands by turnover.
See civil engineeringAccountancy and financial services
Regulated, with a minimum limit calculated differently below a fee income threshold, and a six-year run-off obligation.
Recruitment companies
Placement, vetting and reference claims, where the exposure is the candidate rather than the advice.
Marketing, media and creative agencies
Rights clearance, unintentional defamation and campaigns that did not deliver.
The label matters less than what you put your name to. A firm that recommends a supplier and a firm that designs the thing itself carry different risks even where both call themselves consultants, and the wording follows the work rather than the job title. Where design sits inside a construction package, the sector version is contractors all risks insurance.
Where the requirement comes from
Who Has To Hold Professional Indemnity?
Some UK professions must hold it because their regulator says so, with a minimum limit set in the rules. Most businesses have no such duty. For them the requirement arrives in a client contract, which means there is no minimum and no default.
| Who you are | Mandatory? | How the level is set |
|---|---|---|
| Solicitors | Yes, by the SRA | A minimum set in the rules, higher for recognised and licensed bodies |
| Chartered surveyors | Yes, by RICS | A minimum that steps up through income bands |
| Architects | Yes, by the ARB | A minimum each and every claim, set in the regulator guidance |
| Chartered accountants | Yes, by the ICAEW | A minimum single and aggregate figure, calculated differently below a fee income threshold |
| Certified accountants | Yes, by the ACCA | A minimum above a stated income level, otherwise a multiple of income |
| Insurance intermediaries | Yes, by the FCA | A per-claim and aggregate minimum, or a percentage of income up to a cap |
| Construction designers | No statutory duty | The obligation comes from the appointment, not from law |
| Consultancies, tech, agencies | No | Every term is negotiable, and every term is yours to get right |
Check the current figure with your own regulator rather than with any page, including this one. The minimums get revised, the accountancy bodies calculate theirs differently below a fee income threshold, and the intermediary figures are still expressed in euros while the regulator has consulted on converting them to sterling.
The mechanism that decides your cover
The Notification Deadline Almost Nobody Writes Down
A circumstance you notify in writing before the policy expires is treated as a claim made during that policy, however long the real claim takes to arrive. Stay silent and the old policy is never triggered, while the next one excludes what you already knew.
Something goes quiet on a job
A client stops paying, queries the work, or a defect appears. Nobody has demanded anything from you yet, so it is a circumstance rather than a claim.
You tell the insurer, in writing, before expiry
The step that costs nothing and is routinely skipped. Set out the facts and what might follow, not just the symptom you have noticed.
The claim arrives two years later
On a policy that never heard of it. Because you notified, the deeming clause sends it back to the year you reported it and that policy answers.
Notifying is not enough on its own, because a notification is read against its own four corners. Written narrowly it buys cover for what it describes and nothing else: a firm that reported one specific defect found the unrelated ones discovered later fell outside it. Written broadly, covering what might follow rather than only what you have seen, it can reach problems that surface afterwards so long as they trace back to what you knew. Describe the project, your scope and the period of the work, send it by the route the policy specifies, and keep proof of the date.
Pricing
How Much Does Professional Indemnity Insurance Cost?
Nobody can price a firm from its job title. The rating follows fee income and what you advise on, how far back the cover has to reach, the limit and aggregation basis you need, whether defence costs sit inside the limit, and your claims history.
What the firm is
- Fee incomeAnd how it splits by type of work.
- What you advise onThe riskiest line, not the average one.
- HeadcountFee earners, and who signs off.
- Where clients areTerritory and jurisdiction both count.
How far back it reaches
- Retroactive dateThe single biggest lever on the price.
- Years tradingHow much past work sits behind you.
- Continuity of coverAny gap, and when it happened.
- Run-off neededFor a predecessor firm or a closed practice.
The cover itself
- Limit of indemnityAs your appointments actually require.
- Aggregation basisAny one claim, or in the aggregate.
- Defence costsInside the limit, or in addition to it.
- Claims and circumstancesFive years, including what you notified.
No premium figures appear here, and no figure for what contracts typically require. We looked for an authoritative published UK source for both and could not find one. The standard construction and consultancy forms leave the level to be completed per job, which tells you it is a negotiated commercial term. More in our guide to what professional indemnity costs.
Before you start
What Do I Need for a Professional Indemnity Quote?
Fee income by type of work, headcount, your current retroactive date, any gap in cover, five years of claims and notified circumstances, and the indemnity clause from your largest appointment.
About the firm
- Fee income for three years, split by type of work
- Headcount and who signs work off
- Where your clients are based
- Your largest single appointment
About your history
- Your current retroactive date
- Any period you have been without cover
- Five years of claims and notified circumstances
- Anything you are aware of but have not yet reported
Limits and contracts
- The indemnity clause from your largest appointment
- How many years you must maintain cover afterwards
- Whether defence costs must be in addition to the limit
- Any predecessor firm needing run-off
The last line of the middle column is the one that matters. Anything you are aware of and have not reported goes to your current insurer before the policy ends, not onto the proposal form for the next one.
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How to Compare Indemnity Quotes
Compare the retroactive dates before the premiums, read the aggregation wording, and find out whether defence costs erode the limit. Those three decide what a policy is worth far more than the headline figure does.
Compare the retroactive dates first
Two quotes with the same limit and different retroactive dates are not the same product. One may cover nothing you have already delivered.
Read the aggregation wording
It decides how many limits you get. A clause treating everything from one original cause as a single claim means one limit for a whole series, not one per client.
Check whether defence costs sit inside the limit
A costs-inclusive limit erodes while the lawyers work, so the money left to pay damages shrinks as the case goes on. Costs in addition normally costs more, and for some regulated professions it is required anyway.
Describe the firm once and specialist UK brokers can come back to you. MyMoneyComparison.com is an introducer rather than a broker, so we do not sell the policy or recommend one. Our editorial policy sets out how we work.
Cutting costs
How Can I Reduce the Cost of Professional Indemnity?
A clean notification record, tight engagement letters, a precise description of the work and an unbroken retroactive date are what move the price. Reviewing the excess helps too.
Keep the notification record clean
A firm that reports circumstances promptly and in writing looks like a firm that manages risk. One that surfaces surprises at renewal does not.
Tighten your engagement letters
Scope, deliverables and a liability cap you can defend. Underwriters read these, and so does anyone suing you.
Describe the work precisely
A vague description gets rated for the riskiest thing it could mean. Splitting advisory work from design prices better.
Protect the retroactive date
Never let cover lapse, even for a month. An insurer can sometimes be asked to apply the earlier date afterwards, but it costs extra and it is not always agreed.
Buy the limit your contracts need
Not the largest available, and never below what your biggest appointment specifies.
Review the excess
Carrying more of the small, frequent disputes yourself can bring the premium down noticeably.
If the firm also has an office and staff, that side sits with office insurance and employers liability insurance.
Jargon buster
Indemnity Jargon, Explained
The words that decide a professional indemnity claim, in plain English. There is a longer general list in our insurance jargon buster.
- Claims-made
- Cover answering claims first made against you during the policy year, whatever year the work was done.
- Retroactive date
- The date on your schedule before which past work is not covered, however long you have held a policy.
- Circumstance
- Something that might lead to a claim but has not yet, and the thing you are required to report.
- Deeming clause
- The term treating a notified circumstance as a claim made during the policy you reported it under.
- Prior knowledge exclusion
- The clause in the next policy removing anything you already knew about when it started.
- Run-off
- Cover kept running after the firm stops trading, so late claims still have a policy to attach to.
- Aggregation
- The wording deciding whether related claims share one limit or each get their own.
- Costs inclusive
- A limit that defence costs eat into, leaving less to pay the damages.
Why MyMoneyComparison.com
Comparing Professional Indemnity Cover
MyMoneyComparison.com is an FCA-authorised UK comparison service that introduces companies to specialist brokers. We do not sell insurance and we do not give advice: the broker you choose arranges the policy. Comparing is free and there is no obligation.
Form for the whole company
Describe the firm, the work it does and the limit its appointments require once, instead of repeating yourself to every broker in turn.
Advice given
We are an introducer, not a broker. We do not sell policies and we do not recommend one. Read our editorial policy.
Authorised and regulated
MyMoneyComparison.com Ltd appears on the FCA register under FRN 916241.
Comparing since
A UK company since 2013, working with specialist brokers across the country.
FAQs
Professional Indemnity Insurance FAQs
The questions UK firms ask most.
What is professional indemnity insurance?
What does professional indemnity insurance cover?
When does the policy respond?
What is a retroactive date?
Why does a cheap renewal quote sometimes cost more later?
What is a circumstance, and why does it matter?
What happens if I do not notify a circumstance?
Is there a right way to write a notification?
Can a notification be too narrow?
Do I need run-off cover if I stop trading?
How long should run-off last?
Is professional indemnity insurance compulsory?
Is there a minimum limit for construction designers?
How much cover do contracts usually require?
What is aggregation and why does it matter?
Should defence costs be inside or outside the limit?
Does it cover the cost of redoing my own work?
Does it cover a data breach?
Can I take a declined claim to the ombudsman?
Are insurers excluding artificial intelligence?
How much does professional indemnity insurance cost?
Ready when you are
Compare Indemnity Quotes
Tell us what the firm does, how far back the cover needs to reach and the limit your appointments require, and specialist UK brokers can come back with quotes. Free to use, with no obligation to buy.
- Consultancies, agencies and professional firms
- Advice, design and specification
- FCA authorised and regulated
Free to use · No obligation · UK brokers
About this page
This page sets out what professional indemnity insurance is, how it is triggered, what it reaches and what drives the price, for established UK companies and professional firms with employees and client contracts rather than sole-trader freelancers. It is general information and not advice. Wordings differ a great deal, so read your own schedule and take the questions raised here to your broker. For the sector versions see technology company insurance, engineering company insurance and construction company insurance.
How we researched this page
- Several current UK professional indemnity wordings, including an approved minimum wording, for the deeming clause and the prior knowledge exclusion
- The published rules of the UK regulators that mandate cover, for who must hold it and how the level is set
- Guidance issued by a UK accountancy body to its own members on retroactive dates at renewal
- The main UK construction and consultancy standard form contracts, for how the required level is actually specified
- Reported UK decisions on the scope of a notification and on aggregation, used for the principle rather than quoted
No example premiums appear here, and no figure for what contracts typically require, because we could find no authoritative published UK source for either. Where wordings differ we say so rather than picking one and calling it the market. Four things in wide circulation are corrected on this page: that the policy responds to when the work was done, that a cheap renewal is simply cheaper, that notifying a problem is optional until somebody actually sues, and that UK insurers are applying blanket artificial intelligence exclusions.
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