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Consultants
Professional indemnity (PI) insurance for a single-client consultant covers claims that your advice or work for that client was negligent and caused it financial loss. It matters because, although no general law makes most consultants buy it, the client’s contract usually does, often with a set limit and years of cover after the engagement ends.
Part of: PI insurance for management consultants: UK guide
In short
Most UK consultants are not legally required to hold PI, but single-client contracts commonly require it, specify the limit and say how long cover must continue afterwards. Your liability comes from the implied term to use reasonable care and skill under section 13 of the Supply of Goods and Services Act 1982 and from negligence. One client concentrates the risk rather than reducing it: claims are sized by the client’s losses, not your fee. PI is claims-made, so plan run-off when the work ends. IR35 is a separate tax question and does not decide whether you need PI.
Last reviewed 13 October 2026 by the Apex professional indemnity team.
Usually not. No general UK law makes a business, management or freelance consultant hold professional indemnity insurance. Compulsory indemnity is tied to particular regulated professions. For example, the Health Care and Associated Professions (Indemnity Arrangements) Order 2014 amended the rules for doctors, dentists, nurses, pharmacists and other health professions so that registrants need indemnity arrangements. Consulting as such has no equivalent.
The obligation normally comes from the contract instead. When a business takes on a single outside consultant for months at a time, its consultancy agreement or supplier terms commonly include an insurance clause that sets out:
Signing that clause without the policy puts you in breach from day one, even if nothing ever goes wrong with the work.
A client that loses money because of your work can usually sue in contract, in negligence, or both.
| Source | What it says | Why it matters to you |
|---|---|---|
| Supply of Goods and Services Act 1982, section 13 | In a contract to supply a service in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill | The duty applies even if your written terms never mention it (England, Wales and Northern Ireland) |
| Negligence (common law) | A duty to take reasonable care can arise outside the contract | Clients can claim in tort as well as contract |
| Unfair Contract Terms Act 1977, section 2(2) | Between businesses, a term limiting liability for negligence, including breach of a contractual duty of reasonable care or skill, must satisfy the requirement of reasonableness | A cap in your terms is not automatically safe; it has to be reasonable |
| Limitation Act 1980, sections 5, 2, 14A and 14B | Six years for contract and tort from when the cause of action accrued; for latent negligence damage, three years from knowledge if later, with a 15-year longstop from the negligent act | Claims can arrive long after the engagement. These periods apply in England and Wales |
A single client concentrates the risk rather than reducing it: your income, reputation and any dispute all sit with one counterparty.
Three illustrative examples, not real claims:
Points that make single-client work heavier than it looks:
How you are engaged changes who signs the contract, and so whose name the insurance should be in. This is background, not tax advice.
IR35 status is a tax question. It does not decide whether you need PI, and holding PI does not settle your tax status. A client contract can require PI whatever the IR35 outcome.
PI usually pays damages and defence costs for claims that your advice or work caused financial loss, up to the limit and subject to the policy terms. Other risks need other policies.
| Risk | Policy usually engaged | Common gaps |
|---|---|---|
| Negligent advice, errors in reports or models, missed deadlines causing loss | Professional indemnity | Work outside the business description you gave; known circumstances not disclosed |
| Liability you accepted only because of the contract, such as an uncapped indemnity | PI only to the extent you would have been liable anyway, on many wordings | Contractual liability exclusions are common; check before signing |
| Injury to a visitor or damage to client property while on site | Public liability | PI usually excludes bodily injury and property damage |
| Injury or illness to your own employees | Employers’ liability | See below on when it is compulsory |
| Fines, penalties, tax owed after an IR35 review | Wordings commonly exclude fines and penalties | Tax liabilities are not what PI is for |
Employers’ liability. GOV.UK says you must have it as soon as you become an employer, with cover of at least £5 million. HSE’s guide to the 1969 Act lists exemptions, including a company employing only its owner where that employee owns 50% or more of the issued share capital. HSE notes the family business exemption does not apply to family businesses incorporated as limited companies.
PI is normally written on a claims-made basis: the policy that responds is the one in force when the claim is first made against you, not the one in force when you did the work. For a consultant with one client, this matters most at the end.
If an engagement ends, you take a permanent job and let the PI lapse, a complaint from the former client the following year may have no policy to go to. Limitation periods keep that window open for years.
If this affects your business, these are the points a broker will ask about:
Speak to a broker
PI for single-client consultants, reviewed by a named broker
Start the online proposal and save it as you go, or leave your number and a named broker will call you back, usually the same working day.
Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
Usually yes in practice, though not normally by law. Single-client consultancy agreements commonly require professional indemnity at a stated limit, and often public liability too. Even without a contract term, you owe that client a duty of reasonable care and skill, and one claim could match or exceed everything the engagement earns you.
There is no general legal requirement for consultants, unlike some regulated professions such as the health professions, whose indemnity rules were amended by a 2014 Order. Clients ask for PI in their contracts, and it is the cover designed for claims that your advice or work caused financial loss, subject to the policy terms.
No. The off-payroll working rules decide how Income Tax and National Insurance are handled when you work through an intermediary. They do not change your duty of care or the client’s insurance clause. PI wordings commonly exclude fines and penalties, and PI is not designed to pay tax. Take tax advice from an accountant.
PI is normally claims-made, so it responds to claims first made while a policy is in force. If you stop the cover when the engagement ends, a later claim about that work may have nowhere to go. Many contracts require you to keep cover for a set number of years; run-off cover is designed for this.
Do not assume it does. Whether you are protected depends on what insurance, if any, the umbrella or agency holds, who the policy names and how it is worded. Ask for written confirmation of the cover, its limit and whether it meets your client’s contract before you rely on it.
Complete the online PI proposal with your client’s insurance clause to hand, and a named broker will review it against the limit and wording the contract asks for. Or call 0117 325 0027.
Start your PI proposal Call 0117 325 0027Apex 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. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
