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Insurance explained
Professional liability insurance is the US name for what UK firms usually call professional indemnity (PI) insurance: cover for claims that your advice or service caused a client loss. The label matters when a contract, tender or overseas client asks for cover by a particular name.
Part of: Professional indemnity insurance
In short
In the UK, professional indemnity insurance and professional liability insurance normally describe the same thing: cover for your legal liability to pay compensation, plus defence costs, when a client or third party says your advice, design or service was negligent or fell short. Professional liability, and errors and omissions (E&O), are the terms more common in the US. Most UK PI policies are written on a claims-made basis and many use broad civil liability wording. The name rarely matters. The wording, the jurisdiction clause and the territory often do, especially if you work for US clients.
Professional indemnity insurance protects a business or individual against claims that they breached a professional duty: bad advice, a design error, a missed deadline, a mistake in a report or a failure to deliver a service with reasonable skill and care. It usually pays the compensation you are legally liable for and the cost of defending the claim, subject to the policy terms. Our plain English guide to professional indemnity insurance covers the basics in more depth.
UK regulators and professional bodies tend to use the phrase professional indemnity. The Solicitors Regulation Authority, for example, says that all authorised firms "must have a valid professional indemnity insurance policy" and that cover must meet its minimum terms and conditions (SRA guidance on indemnity insurance). The FCA's rules for insurance intermediaries also use the term, which we explain on our page about FCA PI requirements for brokers.
In the US, professional liability is the umbrella term. Errors and omissions, or E&O, is common for technology, media, brokers and agents, and malpractice is the usual word for doctors and lawyers. A UK firm buying PI and a US firm buying professional liability or E&O are, in most cases, buying the same kind of protection. Our comparison of PI and E&O and our note on PI and E&O terminology set out the overlap.
UK health legislation uses a third form of words. The Indemnity Arrangements Order 2014 requires practising doctors and other regulated health professionals to hold an indemnity arrangement giving appropriate cover "against liabilities that may be incurred in practising". Different labels, same underlying idea: protection against liability for professional work.
Whatever it is called, this cover is usually written on a claims-made basis. The policy that responds is the one in force when the claim is first made against you, or when you first notify circumstances that might lead to a claim, not the one in force when the work was done. The Charity Commission makes the same point, noting that "as is common" such a policy "only covers claims which are instituted during the period of cover" (Charity Commission CC49). See claims-made vs occurrence for how this differs from public liability.
Three features follow from the claims-made basis:
UK wordings also vary in scope. A civil liability wording usually covers any civil claim arising from your professional business, including breach of contract, breach of confidence and unintentional defamation, subject to exclusions. A narrower negligence only wording responds only where negligence is alleged. Our page on civil liability explains the difference.
| Usually covered (subject to terms) | Usually excluded or covered elsewhere |
|---|---|
| Claims for financial loss caused by negligent advice, design or service | Bodily injury and property damage claims, which sit under public liability |
| Defence costs, often including costs of responding to a complaint | Fines and penalties, where not insurable by law |
| Breach of confidence and unintentional defamation, under civil liability wordings | Contractual promises that go beyond the duty of reasonable skill and care |
| Loss of documents or data in your care, often to a sub-limit | Known claims or circumstances before the policy started |
| Claims from third parties who relied on your work, depending on the wording | Claims brought in US or Canadian courts, unless the jurisdiction clause allows them |
Contractual liability is a frequent gap. If you agree to indemnities or fitness for purpose duties in a contract, PI may not follow you there. See how PI treats contractual liability.
The two names describe the same cover, so the question to ask is not which name is right but whether your policy does what the other party expects. Some illustrative cases:
Illustrative example: a US client contract. A Bristol marketing consultancy signs a services agreement with a US company that requires "professional liability (E&O) insurance" at a stated limit. A UK PI policy can satisfy that clause, but only if the jurisdiction clause allows claims in US courts and the limit matches the way the contract measures it.
Illustrative example: a software developer. A UK developer is asked for technology E&O. In the UK this is often sold as technology PI, sometimes combined with cyber cover. The developer should check that both the professional and the data breach risks the client cares about are within the policy.
Illustrative example: an engineer with US work. An engineer's UK policy covers worldwide work but excludes claims brought in the US and Canada. A project with a US owner could leave a gap unless the insurer agrees to extend the jurisdiction.
A common misunderstanding is that professional liability means public liability. It does not. Public liability covers injury and property damage to third parties, while PI covers financial loss from your professional work. Our PI vs public liability comparison sets this out. For US exposure, see PI and US jurisdiction, PI and US exposure and territorial and jurisdiction limits.
Apex arranges professional indemnity insurance for UK firms, including those with overseas clients; a broker reads every enquiry.
In most cases, yes. Professional indemnity is the usual UK name and professional liability is the usual US name for cover against claims that your advice or service caused a loss. What matters is the policy wording: scope, limit basis, jurisdiction and exclusions can differ between policies regardless of the name used.
It may. Check that your jurisdiction clause allows claims brought in US courts, that the limit meets the contract and is measured the same way, and that the services you provide for the client are declared. Many UK policies restrict US and Canadian claims unless the insurer has agreed to extend them.
Errors and omissions is another name for the same family of cover, common in the US and used in the UK for technology, media and broking risks. A technology E&O policy may also include cyber cover, so compare what each policy actually covers rather than relying on the label.
Professional mistakes often come to light years after the work is done. A claims-made policy responds to claims first made, or circumstances first notified, while it is in force. That is why continuous cover, the retroactive date and run-off after you stop trading are important to check.
Usually not. Bodily injury and property damage are normally covered by public liability insurance, and many PI policies exclude them. Some professions, such as healthcare and design, have specialist wordings where injury caused by professional advice or treatment is covered, so check the policy terms.
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Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
