Professional Indemnity (PI) Insurance protects professionals and businesses that provide advice, services, designs or certifications, where a client alleges they have suffered financial loss due to a mistake, omission or breach of professional duty.

PI is a critical cover across many industries and, in some cases, is mandatory under licensing, contractual or professional body requirements.

At Rivergum Insurance Brokers, we help clients structure PI insurance so it aligns with what you do, how you contract, and how claims-made policies actually operate.

What Professional Indemnity Insurance Covers

Professional Indemnity generally responds to civil claims (and often certain investigations) alleging a wrongful act in the performance of professional services.

Common claims PI may respond to

• Negligence in advice or services

• Errors or omissions

• Breach of professional duty

• Misrepresentation (usually unintentional)

• Breach of confidentiality

• Defamation, libel or slander (policy dependent)

• Limited intellectual property infringement (policy dependent)

• Legal defence costs (often a major part of the claim)

PI primarily responds to financial loss. Claims involving bodily injury or property damage are usually dealt with under Public Liability, unless specifically included as a result of a professional act.

Who Professional Indemnity Covers

Depending on the wording, PI policies typically cover:

• The business/entity

• Directors and officers (for professional acts)

• Employees

• Past employees

• Contractors or sub-consultants (subject to conditions and contracts)

Cover only applies to the professional services defined in the policy, making accurate disclosure critical.

Types of Professional Indemnity Policy Wordings

Not all PI policies are the same. The wording used should reflect your role, contractual obligations and risk profile.

1. Design & Construct (D&C) Professional Indemnity

Who this wording is typically for

• Design & construct contractors

• Builders with in-house design capability

• Contractors taking responsibility for both design and construction outcomes

Key features

• Covers professional services relating to design responsibility assumed under a D&C contract

• Responds to claims alleging design errors, coordination failures or specification issues

• Often interacts closely with construction contracts and warranties

Important considerations

• Construction activities themselves are usually excluded (covered under Contract Works / Public Liability)

• Contractual liability assumptions must be reviewed carefully

• Some D&C policies restrict cover for fitness-for-purpose obligations

2. Engineering & Design Professional Indemnity

Who this wording is typically for

• Engineers (civil, structural, mechanical, electrical)

• Architects and designers

• Surveyors and technical consultants

• Engineering consultancies

Key features

• Focused on pure design, advice, certification and consultancy services

• Broader treatment of professional judgement and design risk

• Often includes higher scrutiny of experience, peer review and quality control

Important considerations

• Fitness-for-purpose obligations may be limited or excluded

• Design life warranties and contractual guarantees can create uninsured exposure

• Some wordings include limited cover for rectification costs, others exclude them

3. Miscellaneous Professional Indemnity

Who this wording is typically for

• Consultants and advisers outside traditional professions

• IT consultants and technology service providers

• Management consultants

• Trainers, assessors and certifiers

• Recruitment and HR service providers

• Marketing, media and creative professionals

Key features

• Broad, flexible definition of professional services

• Designed for non-regulated professions

• Often modular, with optional extensions (e.g. IP, cyber-related cover)

Important considerations

• Services must be carefully described to avoid gaps

• Some financial services or regulated advice may be excluded

• Contractual liability still requires review

Claims-Made Policies: How PI Works

Professional Indemnity is written on a claims-made basis.

What this means

A PI policy responds when:

1. A claim is first made against you, and

2. The claim is notified to the insurer during the policy period,
   regardless of when the work was performed — provided it was after the retroactive date and not excluded.

Continuous cover is essential.

Retroactive Date

The retroactive date is the earliest date your PI policy will cover professional services performed.

• Work done after the retroactive date may be covered

• Work done before the retroactive date is excluded

Maintaining the earliest possible retroactive date is critical when:

• Changing insurers

• Restructuring a business

• Expanding services

Continuity Date

The continuity date relates to how insurers manage known or prior circumstances.

It usually reflects:

• The date from which you have had uninterrupted PI insurance, or

• The date from which insurers assess prior knowledge of potential claims

Gaps in cover can affect continuity and lead to exclusions.

Run-Off Cover

What is run-off cover?

Run-off cover protects you against claims made after you stop practising, where the work was done while you were active.

When run-off is needed

• Retirement

• Sale or closure of a business

• Exit from an industry

• Cancellation of PI insurance

How run-off is provided

• Automatic run-off (sometimes, with strict conditions), or

• Purchased run-off maintained for a defined period

Run-off duration should reflect realistic claim timeframes in your industry.

What PI Typically Does Not Cover

Common exclusions include:

• Fraud or dishonest acts

• Known circumstances before policy inception

• Contractual liability beyond common law

• Penalties and fines (other than defence costs, where insurable)

• Construction work itself (unless specifically included)

Why Professional Indemnity Requires Specialist Advice

Gaps often arise where:

• The wrong wording is selected

• Contracts impose obligations insurance won’t cover

• Retroactive dates are reset

• Run-off is overlooked

Why Arrange Professional Indemnity Through Rivergum?

We help clients:

• Select the appropriate PI wording (D&C, Engineering, Miscellaneous)

• Align insurance with contracts and services

• Protect retroactive and continuity dates

• Plan for run-off and business transitions

• Manage PI claims effectively

Our focus is on ensuring PI responds when allegations arise — not just when policies are issued.

Speak With Us

If you’d like to review your Professional Indemnity insurance or ensure your wording aligns with your services and contracts, we’re here to help.

Contact Rivergum Insurance Brokers to discuss your profession, contracts and risk exposure.