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Liability cover
Professional Indemnity Insurance
Professional Indemnity (PI) insurance protects professionals and firms against claims that their advice, design or service caused a client a financial loss. It covers the legal defence costs and any damages awarded, so one disputed engagement does not threaten the practice.
Key takeaways
- Professional Indemnity (PI) covers claims that your professional advice, design or service caused a client financial loss.
- It typically pays legal defence and investigation costs plus damages or settlements.
- It is claims-made cover: it responds to claims raised while the policy is in force, which is why continuous cover and run-off matter.
- The retroactive date decides how far back your work is covered; earlier is better and it is lost if cover lapses.
- PI differs from public liability: PI is financial loss from your advice, public liability is third-party injury or property damage.
- Many Indian client contracts, tenders and professional-body empanelments now require PI cover as a condition to work.
What it covers
Claims alleging negligence, error, omission or breach of professional duty in the work you were paid to do. It typically pays defence and investigation costs plus damages or settlements, and often covers loss of documents and unintentional breach of confidentiality.
Cover responds to claims made against you, which is why professionals keep it in force continuously, including a run-off period after a contract or the practice ends.
Who needs it
Doctors, architects, engineers, chartered accountants, lawyers, consultants, IT and software firms, designers, brokers and management consultants, anyone whose advice or deliverable a client relies on and could sue over. Many client contracts and empanelments now require PI cover as a condition to work.
How to buy it right
The limit should reflect the size of the contracts you handle and what a realistic worst-case claim could cost, not the cheapest available number. Watch the exclusions, the retroactive date and whether defence costs are inside or on top of the limit.
As independent advisors we compare PI wordings across insurers, because on liability cover the wording decides the claim far more than the premium does.
Frequently asked questions
What is the difference between professional indemnity and public liability?
Professional indemnity covers financial loss caused by your professional advice or service. Public liability covers third-party injury or property damage arising from your operations or premises. Many businesses need both.
Is professional indemnity mandatory in India?
It is not universally mandatory, but many professional bodies, tenders and client contracts require it. Check the current requirements for your profession and your contracts.
What is a retroactive date?
It is the date from which your work is covered. Claims arising from work done before that date are excluded, so keeping continuous cover and an early retroactive date matters.
Related: PI for doctors · PI for chartered accountants · PI for architects and engineers · Public Liability · Cyber Insurance · Talk to an advisor