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Commercial · Professional

Professional indemnity (E&O) insurance

If you give advice, design, write, code or provide a professional service, a client could claim your mistake cost them money. Professional indemnity (called errors and omissions in the US) covers those claims and the cost of defending them.

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At a glance

Ref. COM-PI
Covers
Claims for financial loss caused by negligent advice, errors, omissions, breach of professional duty, and often defamation and IP infringement.
Who needs it
Consultants, accountants, architects, engineers, designers, IT and marketing freelancers, agencies, advisers.
Compulsory for
UK: solicitors, accountants in practice, architects (ARB), financial advisers and more. US: some licensed professions.
How it works
Usually “claims-made”: the policy in force when the claim is made responds, not the one when the work was done.
Don’t forget
Run-off cover after you retire or close the business.

Professional indemnity at a glance

Usually covered

  • Negligent advice or service causing a client financial loss
  • Mistakes, errors and omissions in your work
  • Unintentional breach of confidentiality, defamation or IP infringement (many policies)
  • Legal defence costs, even if the claim fails
  • Loss of documents or data (some policies)

Usually not covered

  • Injury or property damage (that’s public liability)
  • Claims you knew about before the policy started
  • Deliberate or fraudulent acts
  • Contractual guarantees beyond normal professional duty
  • Fines and penalties in many cases

Common add-ons

  • Run-off cover
  • Cyber liability
  • Contract-specific higher limits

General guide only. Cover varies by insurer and policy: the policy wording and key facts document decide what you’re actually insured for.

Claims-made cover and why it matters

Most PI policies are written on a claims-made basis. That means you need cover in force when a claim is made against you, even if the work was done years earlier. If you stop buying cover, past work is unprotected unless you arrange run-off cover. Check the policy’s retroactive date: work done before it isn’t covered.

Choosing a limit

Clients and contracts often set a minimum, and regulated professions have their own rules. Consider the size of your projects and the worst financial loss a mistake could cause. Check whether the limit applies “each and every claim” or “in the aggregate” for the year, and whether defence costs are inside or on top of the limit.

Freelancers and contractors

Many freelancers buy PI because client contracts demand it. Read indemnity clauses in contracts carefully: agreeing to cover unlimited losses can go beyond what your insurance will pay. If you’re unsure about a contract, our sister site ProFinders helps you compare lawyers and other professionals.

Last updated: 15 October 2026

Frequently asked questions

What’s the difference between PI and public liability?
Public liability covers injury and property damage to third parties. Professional indemnity covers financial loss caused by your advice or service. Many businesses need both; see PI vs public liability.
Do I need PI as a sole trader?
If you give advice or provide a professional service, it’s strongly worth considering, and some clients won’t hire you without it.
What is run-off cover?
Cover that continues to protect you against claims about past work after you stop trading, retire or close the business.

Keep exploring

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Directors & officers

Protects directors’ personal assets from claims about how they ran the company.

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PL vs PI

Public liability covers injury and property damage; professional indemnity covers financial loss from your work. How to tell which you need.

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