Professional Indemnity Insurance

What is professional indemnity insurance?

Professional indemnity insurance protects a professional or firm against legal liability for financial loss suffered by a client because of negligence, error or omission in the professional services provided. It pays compensation and the cost of defending the claim. It is the key cover for anyone who is paid for advice, design, certification or specialist skill.

PI is one of the core covers within our liability insurance range. Unlike general liability policies, it responds to pure financial loss, not just physical injury or damage.

Who needs professional indemnity cover?

• Architects, structural engineers, project management consultants and interior designers.
• Chartered accountants, company secretaries, tax advisers and valuers.
• IT services, software, SaaS and cloud companies, where the policy is often called technology E&O.
• Management, HR, environmental and engineering consultants.
• Lawyers, insurance and real estate intermediaries, and recruitment firms.
• Doctors and healthcare providers, who buy a specialised form described on our insurance for doctors and hospitals page.

Many government tenders, infrastructure contracts and large corporate clients now ask vendors to hold PI cover of a stated amount before work begins.

What the policy covers

• Compensation for a client’s financial loss caused by a negligent act, error or omission.
• Defence costs, including investigation, expert witnesses and arbitration.
• Unintentional infringement of intellectual property, where included.
• Loss of or damage to client documents in your care, subject to the wording.
• Unintentional breach of confidentiality or defamation in the course of the work, where included.

What is not covered

• Dishonest, fraudulent or criminal acts, and deliberate breach of contract.
• Claims or circumstances known before the policy started.
• Guarantees, warranties and penalty clauses beyond what law would impose anyway.
• Bodily injury and property damage, which fall under commercial general liability insurance.
• Fines, penalties and trading losses of the insured firm.
• Work outside the professional services declared in the proposal.

Claims-made trigger and retroactive date

Almost all PI policies in India are written on a claims-made basis. The policy in force when the claim is first made pays, provided the work was done after the retroactive date. This makes continuity vital. If you switch insurers, the new policy should carry forward your original retroactive date. If you retire or close a firm, ask about an extended reporting period so late claims on old projects are still covered.

How the limit and premium are decided

Insurers price PI on the profession, annual fee income, type and size of projects, client sectors, share of work for overseas clients, contract terms, risk management practices and claims history. You choose a limit per claim and in the aggregate, and a deductible. The right limit often depends on the largest contract you sign. Where a contract demands a project-specific limit, a single-project PI policy can be arranged. Good documentation, written scopes of work and sign-offs help both the premium and the defence of any later claim.

How MILES helps

• Describe services correctly: an incomplete description of professional services is a common reason for claim disputes, so we get this right in the proposal.
• Compare insurers: we collect terms from several insurers and compare limits, deductibles, extensions and exclusions.
• Protect continuity: we preserve your retroactive date when moving cover and arrange run-off where needed.
• Match contracts: we read the insurance clause in client agreements and flag clauses that ask for more than a PI policy can give.
• Guide notifications: we help you notify complaints and circumstances promptly, which is a condition of most PI wordings.

What we need for a quote

• Completed PI proposal form for your profession.
• Annual fee income for the last three years, split by service and geography.
• Qualifications of partners or key staff, and details of sub-consultants.
• Your largest contracts and any required limits.
• Existing policy, retroactive date and claims history.

Cover, exclusions and premiums depend on the insurer’s policy wording and underwriting. MILES Insurance Brokers Pvt. Ltd. is an IRDAI-licensed direct broker (Life & General, Reg. No. 954); the insurance is issued by the insurer. Insurance is the subject matter of solicitation.