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Professional Indemnity Insurance

This type of insurance is regarded as not just prudent but essential and is often a contractual requirement of an end client before engaging a self-employed contractor, freelancer or any other business owner.

Whereas it is an employer rather than its employee which is legally responsible for any claims made against the work/service provided, if you're a director of a business you carry the risk. Commonly known as ‘PI insurance’, it is widely available through accredited brokers and insurers. For many professionals it’s a prerequisite to practice or be able operate in their industry.

What does Professional Indemnity Insurance cover

Its benefits include covering the scenario whereby a client or customer claim that the service, advice given, or design drafted is inadequate, not as expected or has resulted in a financial loss for the client. Good PI insurance covers legal costs and other expenses incurred in the defence of your position as well as for any damages or costs that may eventually be awarded to the end client. Because claims for professional negligence can be made up to 6 years from the date on which the service was provided, business owners and freelancers should ensure that ‘run off’ cover is included in any insurance they choose to take out.


We are frequently asked questions by our clients about Professional Indemnity Insurance so here’s a few of the common ones:

We would always recommend that you do so as the costs and damages involved in professional negligence claims, proven or otherwise, can be very high and your business may not have sufficient funds to mount a defence.

It’s unlikely. That type of insurance usually relates to the risk of being liable in the event of physical injury to persons or damage to property. Check your policy or with your insurer.

£1m is a typical level of cover but you may feel that you need more depending upon your occupation, specialism, your industry or the size, nature or value of your business contract(s). 

Yes. Business insurance is considered to be a tax allowable expense.

It is often possible to backdate PI insurance provided there are no impending claims against you that you’re aware of. We suggest that you speak to an insurance broker as soon as possible to select a policy which provides this ‘retroactive date’ facility.

There is no doubt that possessing Professional Indemnity Insurance can provide peace of mind to any business owner who holds it. It is also one of the hallmarks of a genuine and responsible business. If you don’t yet have cover and are looking to purchase some, PayStream have partnered with Kingsbridge Contractor Insurance to provide an exclusive rate for limited company contractors. For more information, click the button below.

Business Insurance with Kingsbridge

Directors And Officers Insurance

Directors’ and Officers’ Insurance (D&O) is also known as management liability insurance. Its purpose is to protect entrepreneurs from the risks associated with running a business.

Read about D&O insurance
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