Financial & Professional Services Insurance

Professional services insurance is designed for businesses that provide advice, consultancy, design or other specialist services, rather than physical products. It helps protect firms against claims made surrounding professional negligence, errors, omissions or a breach of duty. This form of professional insurance is essential for solicitors, accountants, architects, consultants and regulated advisers operating within increasingly complex legal and regulatory environments.

Professional indemnity insurance can protect businesses if a client alleges that they have suffered a loss due to professional advice or services provided. While cover varies by policy, it is typically designed to respond to both the costs of defending a claim and the liabilities that may arise from it. This can include legal defence costs and associated expenses as well as compensation or damages awarded to claimants. Policies are also structured to protect against common professional risks, such as:

• Civil liability for breach of professional duty
• Loss of documents or client data
• Unintentional breach of confidentiality or copyright

Not all policies are the same, which is why professional services insurance should always be arranged with specialist advice.

Professional indemnity insurance is mandatory for many regulated professions and strongly recommended for others. This includes but is not limited to:

• Solicitors professional indemnity insurance, required under SRA rules
• Accountants professional indemnity insurance required by many professional bodies
• Architects professional indemnity insurance often required by clients, lenders and regulators
• Other specialist advisers such as consultants; for example, we work closely with IAgSA (Institute of Agricultural Secretaries and Administrators) who advise all members ensure they have suitable professional indemnity insurance in place.

For many firms, PI insurance is both a regulatory and contractual requirement.

If your business provides advice, expertise, or specialist services, professional indemnity insurance is strongly recommended and often essential. Even experienced professionals can face claims where a client alleges financial loss.

This type of professional insurance can respond to claims involving:

• Negligent advice or professional errors
• Breach of professional duty or contract
• Loss of confidential documents or data
• Breach of confidentiality

For regulated firms, PI insurance is frequently a condition of being able to trade.

The amount of professional indemnity insurance required depends on a number of factors, including (but not limited to) your profession, turnover, regulatory requirements and contractual obligations.

• Solicitors, accountants, and architects often have minimum limits set by their governing bodies
• Client contracts may specify required indemnity levels
• Many firms choose higher limits to reflect potential exposure

Your broker can help assess appropriate limits as part of a wider professional services insurance or corporate insurance programme.

systems at a hotel, could lead to significant financial loss. Choosing the correct indemnity period and sum insured here is essential to ensure your business has sufficient time to recover, for more information read our blog on What Is Business Interruption Insurance?

Any material changes, such as to your services, client base or activities, must be reported to your insurance broker promptly, along with any other updates they may request you inform them of. Failure to update your professional services insurance could create gaps in cover, which may lead to compliance or claims issues. Regular reviews help ensure your professional insurance remains accurate, compliant and effective.

Run-off cover is designed to protect against claims made after you stop trading or cease certain activities. As professional indemnity insurance operates on a claims-made basis, a claim can arise months or even years after work was completed.

Run-off cover helps ensure you remain protected for past advice or services, which is particularly important for regulated professions or where long-term client relationships and high-value work are involved.

For a more detailed explanation, read Do You Need Professional Indemnity Run-Off Cover?

Most professional indemnity insurance is written on a claims-made basis, meaning the policy that responds is the one in force at the time the claim is made, not when the work itself was carried out.

This differs from claims-occurring policies, where the policy that was active at the time of the incident occurring responds, regardless of when the claim is made. Understanding this is essential, as it directly impacts how your cover operates and why continuous insurance is so important.

Our blog Claims Made V’s Claims Occurring – How You Are Covered explains in further detail how claims made policies and claims occurring policies work and why is it so important for you to understand the terms of your policy.

A retroactive date is a clause in a policy that allows the insurer to pay out claims made after the previous insurance policy has expired. This is done by endorsing the policy so that it covers incidents that occurred before the policy was issued/incepted. Retroactive dates are common in professional indemnity policies.

The new policy will then start at the “inception date”. Work done before the inception date of the new policy, all the way back to the retroactive date will then be covered. This would be subject to you not knowing of any previous incidents that could give rise to a claim under the new insurance policy. If there is a circumstance which could give rise to a claim, our advice would be to let the existing insurer know so they can log the potential claim as well as update the insurer who has quoted for your business. If the incident has been reported to your previous insurer then, they should acknowledge the claim should it then come in officially at a later date. For a more detailed explanation, read Retroactive Date In A Professional Indemnity Policy.