What it Covers

Professional indemnity covers your legal costs and expenses in defending a claim, and any compensation or costs that may subsequently be awarded, following:

  • Professional negligence, such as making a mistake in a piece of work for a client, or giving them poor advice
  • Unintentional breach of confidentiality and/or copyright
  • Defamation and libel
  • Loss of documents or data
  • Loss of money or goods (for which you are responsible)

Professional indemnity insurance operates on the basis of the claims made during the period when the policy is in force.  A ‘claims made’ policy provides cover for claims which are made and notified to the insurer during the period of insurance.

This means that provided the wrongful act occurs during the period of insurance, and you report it to the insurer during the period of insurance, it will be covered. However, if the policy is cancelled or not renewed, cover will end and any subsequent claim – regardless of when the wrongful act occurred – would not be covered by that policy. It’s important to have professional indemnity cover in place – even between contracts or work.

“Run off” cover insures against claims of professional negligence brought against you after your business has ceased trading. e.g. If you have sold your business or closed it down. It is particularly important for retired business owners to consider as without run off cover in place, you would have to self-fund the defence of the claim.