Insurance For Professionals
Cover for businesses that sell judgement rather than labour, where the claim is a financial loss and nothing has been physically damaged.
Rated On Advice, Not On Activity
Every other sector on this site is rated on what you physically do. Professions are rated on what you advise, and that changes which policy matters. Public liability answers somebody tripping in your office. It does not answer a calculation that cost a client money, a drawing that did not work on site, or a report that missed something. Professional indemnity does, and for several professions it is compulsory rather than optional.
Two features of it catch people out regardless of profession. It responds to when a claim is made rather than when the work was done, so continuity matters more than price. And it stops the day you stop, unless run-off is arranged.
The Cover Most Of These Businesses Need
Professional indemnity
Claims that your advice, design, calculation or report caused a client a financial loss. Pays the defence as well as any settlement, and the defence is frequently the larger figure because it is incurred whether or not the claim succeeds.
Run-off cover
Keeps the policy answering for work already completed after you retire, sell or close. Because claims arrive years later, cancelling on your last day leaves every previous year unprotected.
Cyber and data
Professional firms hold client data and often payment authority, which makes business email compromise the realistic attack rather than a dramatic one. Check the funds transfer sub-limit specifically.
Public and employers' liability
Visitors to the office and staff at work. Employers' liability is compulsory from the first employee at a £5 million statutory minimum, and part time and placement staff count.
Office contents and business interruption
Small next to the professional exposure and still the thing that stops you working. Business interruption should reflect how long it would take to be operating properly again, not just to reopen a door.
Legal expenses
Employment disputes, recovering unpaid fees, and representation at a regulatory or disciplinary hearing, which professional indemnity does not cover.
Claims Made Is The Thing To Understand
Almost every other policy you buy responds to when something happened. Professional indemnity responds to when the claim is made, and that single difference is behind most of the trouble professionals have with it.
Three consequences follow. A gap in cover, even a month, means a claim arriving in that month about work from years ago has nothing to respond to. A new policy often only covers work carried out after the date you first took cover, so switching insurer without carrying the retroactive date across can quietly remove years of past work. And because claims keep arriving after you stop, run-off is not optional at the end.
None of this is hidden and all of it is avoidable. It makes professional indemnity a cover you hold continuously rather than shop each year, and it makes the retroactive date the first thing to check on any schedule.
Setting A Limit On The Right Number
The common error is anchoring the limit to fee income. The loss that flows from a professional mistake belongs to the client, and it is not scaled to what you charged.
A small practice with one large client carries an exposure out of proportion to its turnover. A design error on a modest fee can cost the value of correcting a building. A tax position worth a few hundred pounds in fees can cost a client a great deal more. The question is the size of the loss your mistake could cause, not the size of your invoice.
Two further things on the schedule are worth as much as the headline number. Whether defence costs sit inside the limit or outside it, because a limit absorbing them is smaller than it looks. And whether the limit is any one claim or in the aggregate, which matters a lot for a practice with many similar clients exposed to the same error.
Where A Profession Meets A Building Site
This is the part a general professional policy handles least well, and it is where we spend most of our time, because we insure the contractors as well.
An architect, engineer or surveyor on a construction project picks up obligations that have nothing to do with office risk: collateral warranties to funders and tenants, novation on design and build, net contribution clauses, and appointments that sometimes promise a result rather than reasonable skill and care. That last one matters because professional indemnity covers negligence, and a fitness for purpose obligation is usually outside it.
The practical rule is to have somebody read the appointment before it is signed rather than after. Amendments at that stage are ordinary and routinely accepted; a signed warranty your policy will not stand behind is not something you can unwind.
What Moves The Price
- The profession, and the size of losses a mistake could cause
- Annual fee income and the size of your largest client
- The limit required by your body, your regulator or your contracts
- Whether defence costs erode the limit
- The retroactive date and how many past years are covered
- Claims, complaints and notified circumstances
We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 for a realistic figure.
Regulated professions
Where a professional body sets a minimum limit and holding cover is a condition of practising.
Consultancies
Where the advice is the product and the claim arrives long after the engagement.
Cover that often goes with this
The gaps we most often find sitting next to this policy.
- Professional indemnityThe product page: how the cover works, and where it stops.
- Cyber insuranceClient data, payment authority and business email compromise.
- Legal expensesRegulatory representation and recovering unpaid fees.
- Talk to a brokerSend us an appointment or a warranty before you sign it.
Common questions
What insurance do professional firms need?+
Professional indemnity first, because it answers the claim that actually happens: advice or work that cost a client money, with nothing physically damaged. Employers' liability is compulsory from the first employee. Then public liability for visitors, cyber for the client data and payment authority you hold, office contents and business interruption, and legal expenses for disputes and regulatory representation. For several professions the indemnity is compulsory and the minimum limit is set by your body.
Why does professional indemnity work differently from other insurance?+
Because it is written on a claims made basis. The policy that responds is the one in force when the claim is made, not the one in force when you did the work. That means continuity matters more than price: a gap of a month can leave a claim about five year old work with nothing to respond to, and switching insurer without carrying the retroactive date across can remove years of past work from cover.
What limit of indemnity should a professional practice have?+
Anchor it to the size of the loss your mistake could cause a client rather than to your fee income, because the loss belongs to them and is not scaled to what you charged. A small practice with one large client can carry a very large exposure. Where a body or a contract sets a minimum, treat it as a floor. Also check whether defence costs sit inside the limit and whether it is any one claim or aggregate.
Do I need run-off cover when I stop practising?+
Yes. Claims keep arriving after you stop, so cancelling on your last day leaves every year of completed work unprotected. Most professional bodies require run-off for a stated period, commonly six years, and anyone buying your practice will ask about it. It is normally arranged at the point you close and the premium steps down each year.
Does professional indemnity cover a fitness for purpose obligation?+
Usually not. Professional indemnity covers negligence, meaning a failure to exercise reasonable skill and care. An appointment or warranty that promises a result, or warrants fitness for purpose, imposes a stricter standard that most policies exclude. Those clauses appear quietly in appointments and collateral warranties, which is why having someone read them before signature is worth more than almost anything else on the policy.
Who insures professional practices in the UK?+
Professional indemnity is written by a defined set of specialist insurers, several reached through brokers rather than direct, and some professions have schemes arranged with their own body. Because availability is reasonably broad, what separates placements is wording rather than price: the retroactive date, whether defence costs erode the limit, how contractual liability is treated, and any sector exclusions such as those now common around cladding and fire safety.
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