What is professional indemnity insurance?

Professional indemnity insurance protects your business against claims made by your clients if they lose money because they followed your advice or due to negligent services you’ve offered.

Although professional indemnity insurance isn’t a legal requirement, not having it could mean that if something does go wrong for a client following your advice, your business could be responsible for the legal fees, expenses, compensation costs or other costs incurred in your defence.

What’s covered by professional indemnity insurance?

Professional indemnity insurance is there to cover you if a client or customer of yours loses money because of negligent advice or services you’ve offered. Here are some of the situations you’ll be covered for.

Graphic designer who has used protected intellectual property without consent

To give you more of an idea of the difference, take a look at the types of occupations who might need these covers:

Breach of confidentiality

Unintentionally disclose sensitive information without your client’s consent? You’re covered for the cost of legal support and paying compensation.

Breach of copyright

Cover if a claim is made against you for unintentionally using someone’s intellectual property without permission.

Bodily injury (breach of professional duty)

Injury caused to someone who isn’t an employee, due to advice, design and specifications you’ve provided? 


Protection from compensation claims and legal costs, if you’ve been accused of libel or slander in relation to your business.

Loss of documents

If documents in your care are lost or damaged, we’ll pay for the cost of replacing or restoring them.

Dishonesty of employees

If you’re faced with a civil liability claim made against your business because of fraud or dishonesty or staff professional indemnity insurance can help with legal and compensation costs.

Is professional indemnity insurance required by law?

Unlike employers’ liability insurance, professional indemnity insurance isn’t a legal requirement. However, many clients will prefer to deal with businesses that are protected by professional indemnity insurance and may not work with you if you don’t have it.

Plus, if you wish to join a professional body, it’s likely they’ll require you to you have a certain level of insurance before you’re able to become a member.

What additional cover can I add to my professional indemnity policy?

You can add various other covers to your professional indemnity policy, including cover for:


What type of occupations need professional indemnity?

Professional indemnity is not a legal requirement, but there are several types of occupation that would benefit from this cover. Any professional where a client could lose money if your advice goes wrong should consider professional indemnity. Here are just a few of the most common.

    Why do I need professional indemnity insurance?

    If you provide professional services or consultancy, or handle client data and intellectual property, it’s a very useful protection to have as it covers legal fees and compensation costs if you lose a claim that a client brings against you. 

    You need professional indemnity insurance if:

    You provide advice and consultancy

    Clients can claim compensation if there’s a mistake in the advice you’ve given.

    You handle people’s information

    You could face claims if you accidentally disclose data or infringe on a client’s legal rights.

    Your professional body requires it

    You might belong to a professional body or industry association where professional indemnity insurance is compulsory.

    You provide an expert service

    In case you make a mistake in designs, plans or calculations.

    A client insists you have it

    Many clients will require that you have professional indemnity insurance in place before you can start working for them.

      How much does professional indemnity insurance cost?

      No two policies are the exact same, which means neither are their quotes. There are several things to consider that all have an impact on how much you’ll pay, such as:

      • The level of cover you choose
      • The size and location of your business
      •  Your profession

      As a rule of thumb, businesses that face higher levels of risk will pay more. 

      To find out how much you would pay to get professional indemnity insurance with us, you can click the button below to get a quote online. You’ll automatically save 10%** for buying online, too.

      How much professional indemnity insurance do I need?

      Professional indemnity policies range from £2 million to £5 million cover.

      The level of cover your business needs is entirely dependent on the work you do and how much financial impact a mistake in your line of work would cause. Your policy should have enough cover to full settle any claim and legal fees brought against you.

      Here are a few other things to take into consideration when choosing the level cover you’ll need.

      • The type of work you do and clients you work with
      • The projects you’re working
      • The size of your business
      • The financial impact a mistake on your part would have
      • The type of risks you face
      • Whether you provide consultancy or advice

      It’s also worth checking in with any clients ahead of time to find out if they have any requirements for how much cover you should have in order to work with them.

      Is professional indemnity insurance tax deductible?

      Yes, professional indemnity insurance is a tax-deductible allowable expense.

      As a business owner, you’ll know that certain ‘allowable expenses’ can be deducted when you’re calculating your taxable profit. Business insurance is considered one of these allowable expenses.

      What is a typical example of a professional indemnity claim?

      For example, if you’re an architect who makes an incorrect measurement – a small but significant mistake, that causes a client to make a claim against you – this type of insurance can cover any associated legal costs or compensation claims that may arise as a consequence.

      Depending on the line of work you’re in, there’s a whole host of potential situations that may create a need for professional indemnity insurance.

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      What’s covered?

      Find out what’s covered by AXA Professional Indemnity Insurance, so you get the protection that’s right for you.

      Policy details

      Find out more about our professional indemnity insurance cover in our policy summaries and policy wordings.

      *10% of our customers paid this or less between January and March 2024.

      **This discount is applied automatically and lasts for the lifetime of your policy.