Professional indemnity
Professional indemnity (PI) insurance covers claims that your professional advice or services caused a client financial loss. It pays legal costs and any damages awarded. Also called errors and omissions (E&O) in the US, or professional liability insurance.
Who needs professional indemnity insurance
PI insurance is essential for anyone who gives professional advice or provides services for a fee — consultants, architects, accountants, solicitors, IT contractors, designers, and many others. It is often required by clients as a condition of contract and is mandatory for members of some professional bodies. The cover is typically written on a "claims made" basis — the policy in force when the claim is made (not when the work was done) responds.
For self-employed workers and freelancers who need to understand their full insurance obligations, see our guide to insurance for the self-employed. For business interruption alongside PI, see business interruption insurance.