Category: Insurance definitions · Reviewed by Amy Price, Account Executive · Last reviewed May 2026
Most UK professional indemnity policies do cover unintentional intellectual property infringement — typically copyright, trade marks, design rights, breach of confidence, and in some wordings passing-off and database rights. Cover is usually given as a defined extension to the civil liability insuring clause and is subject to a deliberate-act exclusion, territory limits, and (often) a separate sub-limit.
Intellectual property infringement, in PI terms, is liability the insured incurs for using, copying, distributing or otherwise dealing with someone else’s protected work without the right to do so. In the UK that universe usually covers copyright in literary, artistic, dramatic, musical, typographical and computer-program works; registered and unregistered trade marks; registered and unregistered designs; database rights; rights in confidential information; and the tort of passing off.
A professional indemnity policy is built around a civil liability insuring clause. That clause responds to “any civil liability” arising from the conduct of the insured’s professional business, subject to the exclusions and conditions. Because IP infringement is a form of civil liability, a broad civil-liability wording will already capture it in principle. Most insurers nevertheless deal with IP expressly — either by listing it as a defined extension with its own sub-limit, or by qualifying the main insuring clause with a deliberate-act exclusion.
The cover is for unintentional infringement. A consultant who copies a few paragraphs from a third-party report into a deliverable without realising the report is under copyright; a marketing agency that selects a photograph from a stock library believing it has the right to use it but in fact does not; a software developer who incorporates an open-source library on terms the client’s project cannot accept — these are the everyday claims the cover is designed to respond to.
What is not covered, in almost every wording, is deliberate copying — the conscious decision to use someone else’s protected material without permission, even where the insured believed the conduct would not be challenged. The boundary between unintentional and deliberate is the single most contested point in IP claims under PI policies.
When a claim is notified, three things drive how the policy responds.
First, the deliberate-act test. The insurer will look at how the alleged infringement happened. Where the insured reasonably believed it had the right to use the material (a licence existed, the material was in the public domain, the client supplied it warranting that the rights were clear), the policy typically responds. Where the insured knew it did not have the rights but used the material anyway — even with good commercial reasons — the deliberate exclusion bites.
Second, defence costs. IP litigation is expensive in the UK. A claim that reaches the Intellectual Property Enterprise Court (IPEC) or the High Court can produce defence costs of £50,000 to £250,000 or more before settlement. Defence costs are normally included within the limit of indemnity, so a £500,000 limit can be substantially eroded by defence before any damages are paid.
Third, the sub-limit. Many policies apply a separate IP sub-limit — often £100,000 or £250,000 — below the headline policy limit. The sub-limit is the most the insurer will pay for IP claims in the policy year, regardless of how many separate claims arise.
A few wordings extend cover beyond pure infringement to include the costs of changing branding, recalling materials, or notifying customers where infringement has occurred. These extensions are not standard and need to be requested explicitly.
A Bristol-based marketing consultancy with £180,000 of fee income and a £500,000 each-and-every PI policy delivers a campaign for a client. As part of the campaign, the consultancy uses a photograph sourced from what it believed was a royalty-free stock library. In fact the photographer had not authorised the library to license the image, and the photographer issues a claim against the client and the consultancy for copyright infringement, seeking £35,000 in damages plus an injunction and an account of profits.
The consultancy notifies its PI insurer. The policy has an IP extension with a £250,000 sub-limit and a £2,500 each-and-every excess. The insurer accepts the notification on the basis that the consultancy held a reasonable belief that the stock library had the rights to license the image — the deliberate-act exclusion does not bite.
Defence costs run to £42,000 before the matter settles at £28,000 (damages plus the photographer’s costs). Total insurer outlay: £70,000, less the £2,500 excess paid by the consultancy. The £250,000 IP sub-limit is reduced by £70,000 for the remainder of the policy year, and the headline £500,000 limit is reduced by the same amount because the sub-limit sits within the main limit.
If the consultancy had used the image knowing the licence was disputed, the insurer would have declined the claim under the deliberate-act exclusion, leaving the consultancy to fund the £70,000 itself.
IP infringement cover is critical for professional firms whose deliverables incorporate third-party content or reproduce other people’s intellectual property in some form. The risk concentrates in:
Marketing, design and creative agencies. Use of images, fonts, music, copywriting and brand elements creates constant IP exposure. A single image used across multiple client deliverables can produce a series of claims if the licensing position is wrong.
Software developers and IT consultancies. Open-source licensing terms, code re-use across projects, embedded libraries and SaaS components all create infringement risk. A piece of GPL-licensed code that ends up in a closed-source commercial product can create a serious dispute.
Architects and engineers. Design rights and copyright in drawings can be infringed where one practice’s deliverables are re-used on another practice’s project without authority — including (and often particularly) where the client supplies drawings from an earlier appointment.
Consultants and analysts. Reports incorporating third-party charts, data tables or quoted text without permission produce regular small-value claims.
Publishers and content businesses. Editorial PI exposure overlaps with IP at every turn — ghostwriting, image use, embedded video, syndicated content.
The cover is less relevant to accountancy, legal and pure-advisory firms where deliverables are bespoke and reproduce little third-party material.
Wordings vary in three respects worth checking annually.
Scope of rights covered. Most policies cover copyright, trade marks and breach of confidence. Some explicitly extend to passing off, database rights and design rights. A small number exclude trade-mark claims entirely on the basis that trade-mark disputes are commercial rather than professional. Read the schedule against the IP types that arise in your work.
Territory. Standard cover is usually limited to the UK or to the UK and EU. Worldwide cover excluding the US and Canada is common for firms with cross-border work; full worldwide cover including the US and Canada is available but materially more expensive because of US damages exposure.
Patent infringement. Almost every standard wording excludes patent infringement. Patent disputes are technically complex, very expensive to defend, and damages can be very large. Specialist patent infringement cover exists in the standalone IP insurance market but rarely sits inside a PI policy.
Account of profits and injunctive relief. Damages cover is standard; cover for an account of profits (where the claimant elects to take the infringer’s profits rather than its own losses) and the costs of complying with an injunction are not always included.
Re-branding and recall costs. A small number of wordings extend to the cost of re-branding, recalling printed materials, or notifying customers. These are extensions to request rather than to assume.
Does PI insurance cover copyright infringement?
Most UK PI policies cover unintentional copyright infringement either through the civil liability insuring clause or through a specific IP extension. The cover responds to claims where the insured reasonably believed it had the right to use the material but in fact did not. Deliberate copying — knowing the material was not licensed and using it anyway — falls outside the cover under the deliberate-act exclusion in almost every wording.
Are patent claims covered under PI insurance?
No, almost never. Patent infringement is excluded by the great majority of UK PI wordings because patent disputes are technically complex, expensive to defend and capable of producing very large damages. Firms with meaningful patent exposure need standalone IP insurance from the specialist market. PI cover responds to copyright, trade marks, design rights and breach of confidence rather than patents.
What is the typical IP sub-limit on a UK PI policy?
Sub-limits commonly sit at £100,000 or £250,000 within a £1m or £2m headline limit, although some wordings give the full policy limit to IP claims. The sub-limit caps total IP claims for the policy year. Check the schedule annually — the sub-limit may be lower than you assume, particularly on broad civil-liability wordings where IP is not separately itemised.
Does PI cover claims for using stock photos without a licence?
Yes, usually, where the firm reasonably believed it held a valid licence — for example, where a stock library that did not in fact have the right to license the image purported to license it. Cover responds to defence costs and to settlement or damages. Where the firm knew the licensing position was unclear and used the image anyway, the deliberate-act exclusion can apply.
Are trade mark claims covered?
Most wordings cover trade-mark infringement claims arising from the conduct of the insured’s professional business — for example, choosing a brand name for a client’s product that turns out to infringe a third-party mark. A small number of wordings exclude trade-mark claims on the basis that brand selection is a commercial rather than a professional activity. Check the wording before assuming cover.
Does IP cover extend to the US?
Standard UK policies often exclude US and Canadian jurisdiction or sub-limit it heavily, because US damages, particularly statutory damages for copyright infringement, can be very large. Firms with US-facing work need to request US/Canada cover explicitly and accept the higher premium. The territory clause sits separately from the IP extension and needs to be read with it.
What happens if the client supplied the infringing material?
Liability and cover diverge here. The client may have indemnified the firm against IP issues in supplied content, in which case the firm has a contractual claim back against the client. The PI policy responds in the first instance to the third-party claim and the firm then pursues the indemnity separately. Disclosure of the indemnity to the insurer at notification is normal practice.
Is breach of confidence covered as IP?
Most wordings treat breach of confidence as part of the IP extension or as a parallel head of cover. Disclosure of a client’s or third party’s confidential information, where unintentional and arising from the conduct of professional business, is therefore typically insurable. Deliberate disclosure for personal benefit is excluded as a dishonest act.
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Apex Insurance Brokers Ltd is a Bristol-based UK insurance broker specialising in professional indemnity cover for regulated and non-regulated professional firms. Apex is authorised and regulated by the Financial Conduct Authority, firm reference number 724952, and is registered at Companies House under number 07014570. Contact: info@apexinsurancebrokers.co.uk or 0117 325 0027.
Last reviewed: May 2026 by Apex Insurance Brokers Ltd.
Important: this article is general information, not advice on your specific circumstances. For advice on PI insurance for your firm, contact us on 0117 325 0027 or info@apexinsurancebrokers.co.uk.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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