Professional indemnity insurance is designed to protect you against claims for negligence (such as making a mistake, or giving bad advice). It also provides cover for loss of documents, loss of data, breaches of intellectual property, defamation and libel.

If you do make a mistake for which you are responsible or are deemed to have been negligent, then professional indemnity insurance will cover compensation that you have to pay as a result, as well as the legal fees you have incurred in the process. It will also cover the cost of fixing a mistake you may have made, which could help you to avoid having a larger claim made against you.

A mistake could end up costing you tens or hundreds of thousands of pounds. A minimum of £1,000,000 in professional indemnity cover is seen as standard for most clients and agencies.

It’s worth checking that your professional indemnity policy also includes retroactive cover, which will protect you against any work you did in previous years. Even if you’re accused of a mistake and you don’t think you were negligent, it’s still costly to defend yourself. Professional indemnity insurance provides you with the protection to be able to defend the claim.

Example Claim 

A laptop that contains key work for a client is stolen from your car. The loss of data causes costly delays to your client’s project. Your policy will cover legal defence costs and damages awarded against you.

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