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A Simple Guide To Professional Indemnity Insurance

Professional Indemnity Insurance Lancashire, also known as Professional Liability Insurance or PI Insurance, ultimately covers the costs and expenses of hiring legal help as well as damages to the claimant if awarded. Professional Indemnity Insurance covers against the claims such as professional negligence, breach of copyright or confidentiality or wrong advice.

Why Do You Need Professional Indemnity Insurance?

Many professions require Professional Indemnity Insurance as part of their industry’s requirements, however, even if you aren’t required to have Professional Indemnity Insurance in place for your business it is wise to do so. If you don’t have adequate insurance in place you could run the risk of being liable for thousands of pounds in compensation and legal fees. 

If your client who has filed claims against you is claiming to have lost income due to your negligence you could also see yourself financially liable if the claim is awarded.

Industries that are likely to need Professional Indemnity Insurance are:
  • Businesses who provide advice or professional services to clients which include consulting or contracting.
  • Businesses who provide designs to clients
  • Contractors, consultants, freelancers and self-employed professionals
Types of professions that may need to seek Professional Indemnity Insurance are but not limited to:
  • IT Professionals
  • Designers
  • Recruitment Agencies
  • Teachers and Tutors
  • Fitness Professionals
  • Management and Business Consultants
  • Technical Engineers and Contractors

How Much Does Professional Indemnity Insurance Cost?

Cost of your cover depends on a number of different things. This can include the amount of cover you need and how high risk your business is. Try looking on comparison sites for cover or if you need more help go to a specialist for your area of business who will be able to tailor-make your insurance policy to you.

What are the different types of policy?

There are different types of policy including:

  • Any one claim
  • Aggregate
  • Claims made

Any one claim

Any one claim policies cover up to the full limit for each individual claim made in the period of insurance (usually 12 months). For example, if your insurance policy covered you up to £100,000 you would have up to £100,000 on any claim. So if you had 2 claims, each will both be allocated up to £100,000 each.


Aggregate policies however, provide cover up to the full amount for all amounts of claims made. For example if your insurance policy covered you up to £100,000 and you had 2 claims, these 2 claims would be taken out of the £100,000.

Claims made

Claims made policies cover claims that are made and notified to the insurer during the period of insurance. For example if any wrongful acts have occured during this period of insurance and you have reported it during this period, you will be covered. However, if your policy is cancelled or not renewed during the time of the claim you will not be covered. 


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