What’s covered by professional indemnity insurance

Professional indemnity insurance is a type of business insurance that can potentially save you and your business a lot of money should a claim ever be made against you. These claims can be made if the product or service produced is of a lower standard than expected, if you make a mistake or if you did something that will negatively affect the customer financially. 

Designed for businesses that offer customers advice or services, professional indemnity insurance is not a legal requirement – but it is nevertheless heavily recommended that companies obtain it to cover their backs. After considering the pros and cons of professional indemnity insurance, you’ll likely see it as a necessity. 

Of course, before purchasing any kind of insurance, it’s important to understand what cover it will give you – so let’s break down what falls under professional indemnity insurance.

Costs in defending a claim

As you’ll know if you’ve had to deal with them before, legal fees can often be extremely high and the last thing you’ll want is for your business to have to be paying through the nose for them. Fortunately, professional indemnity insurance covers your legal fees and expenses so that claims being made against you won’t hit your business’ profitability.

Depending on the severity of the case, the average costs of legal defence against employee claims can reach into the six-digit range, so outfitting yourself with the right insurance could save you a lot of money. 


Not every claim may end up having the outcome for which you were looking and so you may find yourself in situations where you owe compensation. If you have professional indemnity insurance, however, your insurance cover will help to cover the costs of your payout, reducing the financial harm to your business. 


When enlisting your services, customers will likely perform some research of their own to look at your past work or testimonials; one of the things which they may consider is your insurance situation. If they can see that you are properly insured, your business will look more trustworthy and official. In this way, you can instil confidence into potential customers and potentially have your insurance pay dividends without a claim ever even being filed.

From being a clear signal to potential clients that you take your work seriously and professionally to protecting your profits from the financial impact of claims against you, professional indemnity insurance offers inarguable benefits. If you’re not already covered, consider looking into your options to safeguard your business today.