What does PI insurance cover? A specialist broker's direct answer

UK professional indemnity insurance covers civil liability arising from a professional's advisory or service activity. This page sets out the scope of standard cover, common exclusions, and where the boundary sits.

Core scope

1. Civil liability for professional negligence, breach of professional duty, or advisory error.
2. Defence costs for claims made against the firm.
3. Regulatory investigation costs in most wordings.
4. Loss of documents and intellectual property in transit or storage.
5. Breach of confidentiality in some wordings.
6. Libel and slander limited to professional services in some wordings.

Standard exclusions

1. Fraudulent or dishonest acts. Wilful misconduct not covered.
2. Criminal fines and penalties not covered.
3. Prior known circumstances not notified.
4. Contractual liabilities exceeding professional duty.
5. Bodily injury or property damage (covered by PL, not PI).
6. Employment-related claims from staff (covered by EL).
7. Cyber breach costs (typically cyber insurance, though overlap exists).

Key features of UK PI wordings

1. Claims-made basis. Cover applies to claims made during the policy period, subject to retro-date.
2. Retro-date determines how far back covered acts extend.
3. Aggregate or each-and-every-claim structure.
4. Defence-cost treatment — inclusive or additional to limit.
5. Aggregation clause treating multiple related claims as one.

Frequently asked

Related reading

• PI vs public liability for professionals
• PI and management liability overlap
• PI defence costs — inclusive vs additional
• PI notification vs claim