Who needs professional indemnity insurance?

Professional indemnity insurance is not a legal requirement – but professionals who work in certain sectors should still consider it one of their core business needs. This is because some industries are much more likely to suffer service-based disputes than others. Some clients may choose to make this insurance a contractual requirement or your industry regulator might say it’s essential.

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Professional indemnity cover is usually a priority if:

• Your business provides professional services, including expert advice and consultancy, to clients
• Your line of work can lead to disputes over quality, vision or copyright – for instance, if you are a graphic designer or architect
• Your work leaves you exposed to claims of professional negligence. If you provide training in a sensitive area such as first aid, this might be the case
• You have access to confidential customer information
• You are a freelancer, contractor, consultant or provide services on a self-employed basis

Accountants, financial consultants, surveyors, engineers and healthcare professionals are all likely to need professional indemnity insurance due to requirements set by their respective industry bodies. Likewise, contractors who provide services to a certain industry – such as the energy sector – are likely to need mandatory cover.

This doesn’t mean PI insurance should be passed over by other types of businesses, however. Journalists and media companies might face intellectual property claims and IT consultants can accidentally breach contractual rules while running software updates. If there’s a chance that clients could take you to court over such a dispute, then taking out professional indemnity insurance is often a good idea.