How much does indemnity insurance cost?

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Professional indemnity insurance covers businesses providing a service – whether it be words, facts and figures or solutions – whatever talent or skill the client is paying for.

This insurance protects you if one of those clients decides to sue you for making a mistake. Sounds dramatic? It is, but it could happen to anyone who runs a service for clients, no matter how carefully you run your business. You can’t predict your clients and sometimes mistakes happen. If you are accused – even if you are wrongly accused – you can’t stick your head in the sand as this is a problem that won’t go away.


Don’t fear – if you are covered by professional indemnity insurance it will pay for your defence. In the worst case that the court finds you responsible, you won’t have to personally dip into your pockets – the insurance will pick up the tab for compensation or damages you have to pay your client and you can get back to making money. Think of indemnity insurance as your secret weapon.

Professional indemnity insurance covers against a range of events, including:

  • Loss of files, documents and data
  • Breach of contract
  • Professional negligence
  • Defamation and libel
  • Unintentional breach of copyright and/or confidentiality
  • Loss of goods or money

Professional indemnity insurance can provide cover for your business should a client lose money or have the reputation of their business damaged due to mistakes in any advice, designs or services that you provide.

How much does professional indemnity insurance cost?

How long is a piece of string? The cost of professional indemnity is calculated on a case by case basis as it varies depending on many different factors. There is no one size fits all solution and price.

The good news is that professional indemnity insurance cover can start from just a few pounds per month and an annual fee that is extremely affordable, especially considering the amount you would have to pay out if you did not have it. No matter how well you run your business, humans are fallible and mistakes can – and do – happen. Professional indemnity insurance offers you peace of mind.

Factors that can make a difference to the cost include:

  • The legal bill – there may be legal costs to pay to defend your case that can quickly and easily run into the thousands. You might also have to compensate your clients
  • The size of the client – whether they have a lot of funds available. If they are wealthy they may decide to sue you simply because it is an option for them

Who needs professional indemnity insurance?

A company that gives advice, provides a service or handles intellectual property may need professional indemnity insurance.

Many industry bodies require that their members are covered by indemnity insurance. Insurance might also be a condition of a contract that you undertake. There’s nothing like getting a nudge from these two to do the sensible thing.

Professional indemnity insurance is especially important for businesses that:

  • Give advice or tuition –  including HR consultants
  • Provide or handle designs – including architects
  • Handle intellectual property – including legal practitioners
  • Provide professional services – including accountants and financial advisors

Chatting about indemnity insurance may come as a surprise to many businesses that might not think they need it, such as coaches and trainers and IT consultants – but all have the potential to face a claim.

It is vital that your professional indemnity insurance is bespoke to your specific business needs. For example, damage limitation cover is crucial for anyone working in media or PR, in case you accidentally leak confidential information ahead of an official press launch date.

Ask yourself – if the worst happened, how much do I want my insurer to pay? Take a pessimistic view when figuring that out, and then go higher. You don’t want to take any risks with your business.

All this seems a lot to think about, especially if you have never faced a claim before. However, the responsibility of managing your own business is considerable and it is wise to protect your company and in turn, anyone dependable on your finances should the worst happen. We can guarantee that you getting insured to protect your business will give you ultimate peace of mind.

Should you require any further advice regarding professional indemnity insurance, just get in touch and our expert team will be happy to advise you.