What does Professional Indemnity Insurance cover?

So, what does Professional Indemnity Insurance cover? Fortunately, Professional Indemnity insurance covers an array of potential risks. Below, we go into a bit more detail of some of the more common legal issues that some professionals may encounter:


Not honouring your professional duty to your client, such as providing the wrong advice or making mistakes in your project, is always a problem for freelancers. Clients can choose not to pay you and/or sue you for damages, regardless of whether you think that you have wronged them.

As negligence is subjective, without the appropriate cover you may not have access to the legal advice and guidance you may need when facing a claim.

Contractual Liabilities

If you and your clients prefer to work under a contract, then this type of professional indemnity insurance is especially important. Commercial contracts will almost always include clauses regarding delivery of a project whilst stating duties will be carried out with ‘reasonable care and skill’. If one of your clients were to make a claim against you on this basis, they will inevitably try to prove that you have failed in this duty and have not delivered a satisfactory or reasonable level of care and skill.

Data Protection and Cyber Risks

Frequently, companies in the PR and advertising sectors will be able to access personal data about customers, which is stored on their clients’ databases. This data might be targeted by hackers.

Protecting data that belongs to clients under data protection laws is vital for freelancers and bigger businesses alike. The Information Commissioners Office” (ICO) has put together a helpful guide covering data protection laws. Although this is aimed at journalists, it is well worth a read if you are a media industry freelancer.

Confidentiality and breach of duty

Knowing information about a client and mistakenly revealing it to someone else is a constant risk.

Imagine, for instance, that you freelance in the PR sector, and are advising a couple of clients who operate in the same industry (they could be competitors). In spite of your best efforts, you disclose a new development or product from the first client, which could give the second client a competitive advantage.

Should the first client discover this, and believe that they have lost money as a consequence, you might be sued for breach of confidentiality or even fiduciary duty.

Under law, fiduciary duty is a relationship of confidence and trust between you, your business and your clients. Issues can arise if your client believes you are not acting within their best interests.

Having the right insurance cover for breach of duty is particularly important in industries such as accountancy, architecture, quantity surveying or estate agency.

Intellectual Property

For freelancers or professional consultants who work in the creative sector, inspiration can be taken from numerous sources when devising marketing campaign ideas, for instance. The problems begin when that inspiration is regarded as too similar to another active campaign. This is how intellectual property disputes commonly arise. Breach of intellectual property rights can also include copyright, trademark, patent, and plagiarism as well as media rights.

Problems with intellectual property can originate from several areas, such as unintentional infringements of trademarks, broadcasting rights or copyright. This covers any perceived copying or passing off another company’s services or products as your own.


In business, reputation is paramount. Due to how easy it is for businesses to publish details on the web, freelancers and SME’s need to be extremely mindful of what they say about competitors, customers and former clients to ensure that they do not get sued for defamation. You know how the old saying goes, “if you can’t say anything nice…”

Do I need Professional Indemnity Insurance?

Firstly, it is worth noting that professional indemnity insurance is not compulsory for all professions within the United Kingdom. 


How much does Professional Indemnity Insurance cost?

As with most insurance, the cost of a professional indemnity policy will depend on certain factors. For example, exposure to certain risks associated with your profession and the size of your business.


What are the legal and financial risks of not having Professional Indemnity Insurance?

Simply put, if you make the decision to operate without the adequate professional indemnity insurance you are leaving your business open to financial claims and legal proceedings from your clients and other potential third parties.


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