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Professional Indemnity Insurance
Coverage for businesses that provide professional advice or services
What is professional indemnity insurance?
Professional indemnity insurance helps protect your business if a client believes your work caused them a financial loss. It's designed for consultants, freelancers, and other professionals who provide specialized advice or services. Think of it as a safety net that can help with claims of negligence, mistakes, and contract issues.
Progressive Commercial can help you understand your risks and find coverage that fits your business. Give us a call to talk to an insurance specialist or start an online quote to learn more.
Why small business indemnity insurance is important
When your business is built on your expertise, even small misunderstandings or mistakes can lead to financial disputes. Professional indemnity for small business helps protect you when a client claims your services didn't meet expectations.
For example, a business consultant might deliver a strategy that doesn't produce expected results, or an accountant could make a tax filing error that affects a client. In these situations, professional indemnity insurance could help cover the legal costs of defending or settling a claim.
What does professional indemnity insurance cover?
Professional indemnity insurance, also known as professional liability coverage, helps with claims of negligence, mistakes, or substandard work. It can protect your business whether the claims are valid or not. Professional indemnity insurance may cover legal fees, settlements, and court-ordered judgements related to claims such as:
- Errors or omissions in your work, like an architect making a calculation mistake that leads to costly construction delays.
- Negligence or failure to meet professional standards, such as a real estate agent neglecting to disclose known issues with a property.
- Misrepresentation or inaccurate advice, like an accountant advising a business owner to deduct non-business expenses.
- Missed deadlines or incomplete deliverables, such as an advertising consultant failing to deliver a commercial in time for broadcast.
Get coverage before you need it
Most professional liability policies are written on a claims-made basis, meaning they only cover claims reported while the policy is active. That's why it's important to have your coverage in place before you begin work. If you cancel your policy or retire, you may want to consider extended reporting coverage to protect against future claims tied to past work.
What isn't covered by professional indemnity insurance?
While professional indemnity insurance can help protect your business in many situations, some types of claims are generally excluded, including:
- Bodily injury or property damage, which fall under general liability coverage.
- Employment-related disputes, which may be covered by employment practices liability insurance (EPLI).
- Cyber breaches and data theft, which are typically covered under cyber insurance.
- Criminal, fraudulent, or intentionally harmful acts, such as deliberately misleading a client.
- Contractual liabilities unrelated to the professional services you provide.
Who needs professional indemnity insurance?
Businesses that provide guidance or expertise should consider professional indemnity insurance. Whether you're a sole proprietor or run a large firm, this coverage can help protect businesses that offer consulting, design, analysis, or other specialized support. It can be a good fit for:
- Attorneys
- Consultants and business advisors
- Accountants and financial professionals
- Insurance agents
- Real estate agents
- Architects and engineers
- IT and software service providers
- Marketing and creative professionals
Professional indemnity insurance is often required by client contracts or professional licensing boards. Even when it isn't, many service-based businesses carry this coverage as part of their risk management strategy.
What's the difference between professional indemnity and general liability insurance?
Professional indemnity and general liability coverages both help protect your business, but they address different kinds of risk. General liability insurance covers bodily injury and property damage claims, while professional indemnity insurance helps with financial losses related to professional work, recommendations, or expertise. Many small businesses carry both as part of a broader insurance strategy.
For example, general liability may apply if a client slips and falls at your office, while professional indemnity could help if an IT professional delivers code that doesn't meet a client's requirements.
How much does professional indemnity coverage cost?
In 2025, new Progressive Commercial customers paid a median monthly premium of $50 for professional liability insurance. The average monthly cost was $69. Insurers look at a range of factors when setting your business indemnity insurance cost, including:
- Your industry and profession
- Years in business
- Claims history
- Number of employees
- Services and clientele
- Location
Learn more about what affects the cost of insurance and get a quote from Progressive Commercial.
Why choose Progressive Commercial for professional indemnity insurance
Progressive Commercial has supported small businesses like yours for more than 50 years. Whether you're a consultant, accountant, designer, or other professional service provider, we can help you find coverage that fits your business. Call us to talk to an insurance specialist or start a quote online.
Frequently asked questions
What is professional indemnity insurance in simple terms?
Professional indemnity insurance is coverage that helps protect your business if a client claims your work caused them a financial loss.
Is business indemnity the same as errors and omissions?
Yes. Business indemnity insurance is another name for errors and omissions (E&O) insurance. E&O is a type of professional liability coverage that protects against claims involving mistakes, missed details, and financial loss. You may see these three terms used interchangeably.
How much professional indemnity insurance do I need?
The right policy limit depends on the size of your contracts, the potential cost of mistakes, and client requirements. You may need higher limits if you work on large projects or serve corporate or government clients.
Do freelancers need professional indemnity insurance?
Freelancers who provide consulting, design, analysis, or other professional expertise may benefit from this coverage, especially when clients rely on their work or recommendations.
Are there legal professional indemnity insurance requirements?
Professional indemnity insurance usually isn't required by law, but many contracts, clients, and professional organizations may expect you to carry this coverage.
When should I get professional indemnity insurance?
It's often best to have coverage in place before you begin working with clients, so you're protected if a claim arises later.
