Compare professional indemnity insurance

Professional indemnity insurance covers businesses against claims arising from mistakes, negligence, or poor service provided in a professional capacity. It’s essential for professionals like consultants, architects, or designers who offer advice or expertise.

Public liability insurance, on the other hand, protects against claims from third parties for injury or property damage caused during business operations, such as a customer slipping in a shop or damage to a client’s property.

Typically, you’re only covered for claims that arise after you take out your professional indemnity insurance. However, it’s worth asking your insurer about retroactive cover, which could extend your protection to work completed prior to the start date of your policy.

If retroactive cover isn't offered, you may need to arrange separate cover for previous work or risk being unprotected for any past claims.

In a professional indemnity insurance policy, the retroactive date is the specific point in time from which the policy will cover claims. If your policy has a retroactive date, it means the insurer will only cover claims for work done after this date.

Claims arising from incidents that took place before the retroactive date are not covered, even if the policy is in effect when the claim is made. It's important to review the retroactive date carefully when purchasing professional indemnity insurance, as it could impact your coverage for past services or advice.

In the UK, a professional indemnity certificate is a document provided by your insurer that verifies you hold active professional indemnity insurance. It outlines key details, such as the policyholder’s name, policy number, level of cover, and the start and end dates of the policy.

This certificate might be requested by clients or regulators to confirm you have sufficient insurance to cover claims. It serves as proof of compliance with industry requirements and/or contractual obligations.

As a business owner in the UK, you can obtain proof of professional indemnity insurance from your insurer. To get this proof you can:

Request it from your insurer or broker: After purchasing or renewing a professional indemnity policy, your insurer will often provide a certificate automatically. If not, you can directly request one.

Check your insurance documents: Most insurers include proof of cover in the initial policy documentation.

Access your online portal: Many insurers and brokers offer customer portals where you can download a certificate of insurance — or other proof of coverage — whenever you like.

While professional indemnity insurance isn’t legally required in the UK, it can be a crucial safeguard for self-employed individuals who provide advice, services, or designs. If negligent advice or mistakes lead to financial loss for clients, this insurance can cover the costs of defending a legal claim and any potential compensation.

It’s also worth noting that clients or companies might refrain from working with you unless you have professional indemnity insurance.

Yes, you’ll typically need to pay an excess when making a claim on a professional indemnity insurance policy. The amount you need to pay will vary depending on the specifics of your policy and the nature of the claim. The exact terms of the excess, such as whether it’s a fixed amount or depends on the severity of the claim, will be outlined in your policy documents.

Indemnity insurance is regarded as an allowable expense, meaning you can deduct the cost of it from your profits before calculating your tax liability. This can help reduce the overall amount of tax you pay.

However, if an employer pays for indemnity insurance on behalf of an employee and the policy benefits the individual rather than the business, it might be classified as a taxable benefit in kind. For clarity on your specific situation, it’s worth consulting with an accountant or tax adviser.

Yes, you can take out a short-term professional indemnity insurance policy in the UK. Many insurers offer flexible coverage options that can be tailored to your specific needs, which can be ideal for freelancers or consultants. Short-term policies can be arranged for periods ranging from a few weeks to several months, depending on the insurer and the nature of the work.

Run-off cover is a type of professional indemnity insurance that provides protection for a business or individual after they cease trading or stop offering professional services. For example, if you retire, close your business, or switch to a different line of work, run-off cover will ensure you're still protected against any claims that may arise from past work.

While you’re not legally required to have run-off cover, some clients or regulators may require it before you end your professional services.