Professional Services Insurance
Cover options for consultants, advisers and firms whose main product is their knowledge and advice.
Industry overview
Professional firms sell expertise rather than physical goods. The main risk is often a client claiming that advice, a design or a service caused them a financial loss.
Some professions have insurance requirements set by their industry body or licence, and clients may also ask for proof of cover in contracts. A broker can explain how professional indemnity and related policies generally work.
Common business risks
Errors and omissions
A mistake in advice, calculations or documents can lead to a claim for financial loss. Even a claim without merit can be costly to defend.
Breach of confidentiality
Professionals often hold sensitive client information. Accidental disclosure can lead to complaints and claims.
Cyber incidents
Email compromise and ransomware can interrupt work and expose client data. Payment redirection scams are a known risk for firms handling client funds.
Claims against directors
Directors and officers can face claims relating to employment matters, regulatory investigations or how the firm is run.
Office damage and disruption
Fire or water damage to the office can stop work and damage equipment and records.
Insurance commonly considered
Businesses in this sector often look at the following types of cover. What suits you depends on your operations, contracts and assets.
- Professional Indemnity InsuranceFirms that give advice or provide professional services commonly consider cover for claims of negligence or error.
- Cyber InsuranceProfessionals holding client data and relying on email may look at cover for breaches and cyber events.
- Management Liability InsuranceDirectors and managers of professional firms may consider cover for employment practices and regulatory matters.
- Business InsuranceA business package may help with office contents, portable electronics and interruption, depending on the policy.
- Public & Product Liability InsuranceFirms that host clients at their office or visit client sites often hold public liability cover.
Risk management considerations
- 1Use engagement letters that clearly set out the scope of your services.
- 2Keep file notes of advice given and key client conversations.
- 3Have a second person review complex or high-value work before it is issued.
- 4Use multi-factor authentication and verify any change to payment details by phone.
- 5Notify your insurer promptly of any circumstance that could lead to a claim, as policies often require this.
Why broker support helps
Professional indemnity policies are generally written on a claims made basis, which affects how and when you notify circumstances. A broker can explain these features and help you meet your notification duties.
Industry bodies and client contracts may set minimum limits or specific terms. A broker can compare these requirements with your current cover and discuss options with you.
Frequently asked questions
What does claims made mean?
A claims made policy generally responds to claims first made against you and notified to the insurer during the policy period, rather than when the work was done. This is why continuous cover and prompt notification are important.
Do I need run-off cover if I close my practice?
Claims can arise after a business stops trading. Run-off cover is a type of policy that may respond to claims made after you close, for work done before. Whether it is needed depends on your profession and circumstances.
Is professional indemnity compulsory?
It is compulsory for some professions under licensing or membership rules, and optional for others. Your industry body or regulator can confirm any requirement that applies.
Does professional indemnity cover cyber incidents?
Professional indemnity generally focuses on claims arising from your professional services. Cyber events such as ransomware or data breach response costs are usually addressed by a separate cyber policy.
Talk to us about insurance for your business.
Tell us how your business operates and we'll discuss the types of cover that may be relevant.