Not every business needs professional indemnity insurance – it isn't legally required. Usually it applies to businesses that offer knowledge, skills or advice as part of their work. It might be needed by a self-employed person like a consultant or an accountant, or by a company doing certain types of work.
Some professionals will need to have professional indemnity insurance if they want to be a member of their professional body, or their industry might have regulations that require them to have the insurance. These professionals include:
- financial advisors
- chartered surveyors
- some medical professionals
You could also find that your contract with a client company requires you to have this cover in place.
The kinds of businesses that might need professional indemnity insurance include marketing agencies, PR consultancies, management consultants, web agencies and design companies. These are all organisations whose advice could lead a company to change its strategy.