Professional Indemnity Insurance

Professionals such as accountants, lawyers, architects, engineers, consultants, financial advisers and IT providers can be sued if their advice or work causes a client to lose money. Professional indemnity insurance covers the cost of defending such claims and any compensation awarded, up to the policy limit.

For example, if an architect's design error leads to costly structural repairs, the client might claim against the architect. The architect's professional indemnity insurance would cover legal costs and compensation.

In many professions, professional indemnity insurance is required by regulators or professional bodies. In the United States, similar cover is commonly called errors and omissions insurance, or malpractice insurance in fields such as medicine and law.

Many professional indemnity policies are written on a claims-made basis, meaning they cover claims made during the policy period, regardless of when the work was done, so professionals often need to keep cover in place, or buy run-off cover, after retiring or closing a business.