In today’s fast-moving business world, even the most experienced professionals can make mistakes. Whether you’re a consultant, designer, engineer, or accountant, one error could lead to costly lawsuits, lost clients, and reputational damage. That’s where Professional Indemnity Insurance (PI insurance) comes in.
This guide explains what professional indemnity insurance is, who needs it, how much it costs, and how to choose the right policy for your business. If you’re offering advice or services, this coverage is essential to protect your livelihood.

What Is Professional Indemnity Insurance?
Professional Indemnity Insurance (also called Professional Liability Insurance or Errors & Omissions Insurance) protects businesses and individuals who provide professional services or advice from claims of:
- Negligence
- Misrepresentation
- Breach of duty
- Mistakes or errors in professional work
- Defamation or slander
- Loss of documents or data
If a client suffers financial loss due to your professional service, they may sue—even if you did nothing wrong. PI insurance covers legal defense costs, compensation payouts, and settlements.
Who Needs Professional Indemnity Insurance?
If your business offers advice, consultancy, or professional services, you should seriously consider PI insurance. It’s often a requirement when bidding for contracts or working with government agencies.
Common professions that need PI insurance include:
- Consultants (business, IT, HR)
- Accountants & bookkeepers
- Architects & engineers
- Web developers & designers
- Legal professionals
- Real estate agents
- Marketing agencies
- Financial advisers
Even freelancers and self-employed professionals are vulnerable to claims, especially if working with large clients or sensitive projects.
Why Is Professional Indemnity Insurance Important?
✅ 1. Protects Against Legal Costs
Lawsuits can be expensive, even if the claim is baseless. PI insurance covers lawyer fees, court costs, and settlements—so you don’t pay out of pocket.
✅ 2. Enhances Client Trust
Clients feel more secure working with insured professionals. It shows you’re serious, responsible, and ready to handle risk.
✅ 3. Contractual Requirement
Many contracts—especially with corporates, tech firms, or governments—require proof of PI coverage before starting work.
✅ 4. Covers a Range of Scenarios
From a missed deadline to incorrect advice that costs your client thousands, PI insurance covers a wide variety of professional risks.
What Does Professional Indemnity Insurance Cover?
Typical policies may include coverage for:
- Negligent advice or services
- Unintentional copyright infringement
- Defamation or libel
- Breach of contract or confidentiality
- Loss of client data or documents
- Errors in professional judgment or calculations
Example: A marketing consultant runs a campaign that damages a client’s brand. The client sues for lost revenue. PI insurance would cover legal fees and damages.
What’s Not Covered?
While coverage is broad, professional indemnity insurance usually does not cover:
- Intentional wrongdoing or fraud
- Bodily injury or property damage (requires general liability insurance)
- Employee injuries (covered by workers’ comp)
- Cyber attacks (requires cyber liability insurance)
How Much Does Professional Indemnity Insurance Cost?
In 2025, the average cost of professional indemnity insurance for small businesses ranges from:
- $500 to $2,500 per year
- $40 to $200 per month
The actual cost depends on:
- Your profession and risk level
- Annual revenue
- Claims history
- Coverage limits (e.g., $1 million per claim / $2 million aggregate)
- Location and regulatory requirements
🛠️ Tip: Use quote comparison platforms like biBERK, NEXT Insurance, or Hiscox to find the best rate.
How to Choose the Right Policy
When comparing PI insurance quotes, look for:
✅ 1. Adequate Coverage Limits
Make sure the limit matches the size and scope of your projects or contracts.
✅ 2. Retroactive Date
This is the date from which your services are covered. Choose a retroactive date that matches the start of your professional work.
✅ 3. Claims-Made vs. Occurrence Policies
Most PI policies are claims-made, meaning the claim must occur while the policy is active. Make sure you maintain coverage continuously.
✅ 4. Industry-Specific Coverage
Some insurers offer policies tailored to specific industries, like tech, healthcare, or finance.
Final Thoughts: Do You Need Professional Indemnity Insurance?
If you offer expert advice, provide services, or handle sensitive information, then yes—you absolutely need professional indemnity insurance. One mistake or misunderstanding could result in legal action that damages your finances and your reputation.
Fortunately, with a variety of affordable options on the market, it’s never been easier to compare quotes and get covered. Protect your business, boost client trust, and work with confidence—get a professional indemnity insurance quote today.