Professional Indemnity Insurance Ireland: Business Guide

The short answer

Professional indemnity insurance (often called PI or professional liability insurance) is designed to respond when a client alleges that a business’s professional work or advice was negligent, wrong or incomplete and caused them a loss. Within the limits and wording of the policy, it can pay for defending the allegation and for damages the business is found liable for.

What it concerns: the quality of professional services, advice, designs and reports.
Who typically claims: clients, and sometimes others who relied on the work.
How it usually works: on a claims-made basis, so continuity of cover and the retroactive date matter.

It is distinct from public liability, which concerns physical injury and property damage.

Businesses that sell expertise carry a risk that a slip in the office rarely creates: a client relies on their work, something goes wrong, and the client says the work was to blame. Professional indemnity insurance is built for that exposure. This guide is for consultants, designers, technology businesses, advisers and other service firms, and explains the parts of a PI policy that behave differently from other business cover. For the wider picture of commercial insurance, see our business insurance overview.

What does professional indemnity insurance cover?

PI policies are generally written around claims alleging a failure in the professional service itself. Depending on the wording, that can include allegations of:

Professional negligence: work not carried out with the skill and care expected of someone in that profession;
Errors: a mistake in a calculation, drawing, specification, report or piece of code;
Omissions: something that should have been done, flagged or included, but wasn’t;
Inaccurate professional work: output that doesn’t meet what was agreed or what the client relied on;
Professional advice: a recommendation that a client acted on and says caused them a loss.

Policies commonly include the legal costs of defending a covered claim, which can be significant even when the allegation is not upheld. Some policies extend to other matters, such as breach of confidentiality, unintentional infringement of intellectual property or loss of documents; others don’t. Not every complaint, dispute or financial loss is insured: a policy responds to allegations within its insuring clause, subject to its exclusions and conditions, and many policies exclude matters such as fee disputes, contractual guarantees beyond the normal duty of care, and deliberate or dishonest acts.

Illustrative scenarios

These invented examples show the kind of allegation a PI policy is typically built around. Whether a particular policy responds depends on its wording and the facts.

Design

An interior designer’s measurements

Bespoke joinery is made to a designer’s drawings and doesn’t fit the space. The client claims the cost of remaking it and the delay to opening their shop.
Technology

A software change goes wrong

A developer’s update to a client’s booking system double-books appointments for a fortnight. The client alleges lost revenue and the cost of putting things right.
Advice

A consultant’s recommendation

A business consultant recommends a supplier contract that later proves unsuitable. The client alleges the advice ignored information they had provided.

Which businesses may consider professional indemnity insurance?

The common thread is that a client pays for knowledge, judgment or skill, and relies on the result. Examples:

Professional indemnity exposure by type of business
Business	What the client relies on	Example allegation
Management and business consultants	Analysis, strategy and recommendations	Advice was based on a flawed analysis
Designers and creative agencies	Designs, specifications and artwork	A print file error meant a full reprint
IT and technology service businesses	Systems, software, configuration and support	A migration lost client data or caused downtime
Professional advisers	Technical, financial or compliance advice	A deadline or requirement was missed
Specialist contractors with a design role	Design or specification as well as installation	An installation designed by the contractor underperformed
Trainers, coaches and other advice-led businesses	Guidance, instruction and materials	Guidance given led to a costly decision

A contractor who only installs to someone else’s design has a different exposure from one who also designs or specifies. Where a business does both, the insurer will usually want to know how much of the work involves design.

Regulatory and contract requirements

Some professions have their own rules about professional indemnity cover, set by a regulator or professional body. Two official Irish examples:

Insurance intermediaries. The Central Bank of Ireland’s guidance for retail intermediaries sets out the requirement for insurance intermediaries registered with it to hold professional indemnity cover that meets specified minimum levels and terms.
Solicitors. The Law Society of Ireland publishes professional indemnity arrangements for solicitors, including run-off cover for firms that cease practice.

These are profession-specific examples: they apply to those professions, not to consultants or professionals generally. If you work in a regulated or accredited profession, check the current requirements with that profession’s own regulator or body.

More often, the requirement is contractual. Clients, particularly larger companies and public bodies, may ask for PI cover at a stated limit, sometimes for a set number of years after the work is finished. Read those clauses before signing: a requirement to maintain cover after completion interacts directly with the claims-made points below.

Professional indemnity vs public liability

This is the comparison most businesses need to get straight, because the two are easily confused and cover different kinds of claim.

Professional indemnity and public liability compared
Point of comparison	Professional indemnity	Public liability
Type of exposure	Loss allegedly caused by professional work, advice or services	Physical injury, or damage to someone’s property, arising from the business’s activities
Typical claimant	A client, or sometimes a third party who relied on the work	A customer, visitor, member of the public or other third party
Example scenario	A surveyor’s report misses a defect and the buyer faces repair costs	The surveyor’s ladder damages the property’s conservatory roof
General purpose	Legal liability and defence costs arising from the service provided	Legal liability and defence costs for physical injury or damage
Usual policy basis	Claims-made (see below)	Commonly written on an occurrence basis

Many professional businesses have both exposures: a consultant who runs workshops, an IT firm that installs hardware on client premises, or an architect who visits sites. Our public liability guide covers the physical side in detail.

Professional indemnity vs employers’ liability

Employers’ liability concerns claims from a business’s own employees for work-related injury or illness. Professional indemnity concerns claims from clients about the work delivered. An employee who injures themselves carrying equipment to a client meeting is an employers’ liability matter; the client who says the advice given at that meeting was wrong is a PI matter. A professional firm that employs staff may consider both, alongside public liability.

Claims-made cover explained

Most PI policies are written on a claims-made basis. The Central Bank’s guidance for intermediaries describes it plainly: the policy covers claims first made against the insured during the period of insurance, regardless of when the negligent act occurred. In practice:

The policy that responds is usually the one in force when the claim is made, not the one in force when the work was done.
Work done years ago can lead to a claim today, and it is today’s policy that is looked to.
If cover lapses, a claim made during the gap may not be covered by any policy, even for work done while cover was in place.
Policies usually ask the business to notify circumstances that might give rise to a claim, such as a client complaint or an identified error, during the policy period. Notifying promptly can matter to whether a later claim is covered.

This is different from an occurrence basis, often used for public liability, where the policy in force when the incident happened responds, even if the claim comes later.

Retroactive date

A claims-made policy may carry a retroactive date: the policy covers claims arising from work carried out on or after that date, and not work done before it. The Central Bank’s intermediary guidance, for example, links the retroactive date on an intermediary’s policy to the date it was registered, in line with its obligation to maintain continuous cover from that date.

For any business, the practical points are:

When switching insurer, check whether the new policy keeps the existing retroactive date. A later date can leave earlier work uncovered.
A new business may have a retroactive date matching its start date, so earlier work done in a previous role or business may not be covered.
The retroactive date appears on the schedule; if it is missing or unclear, ask.

Run-off cover

Because claims can arrive long after the work, stopping PI when a business closes, retires or merges can leave past work uncovered. Run-off cover is designed to address claims made after a business stops trading, for work it did while trading. The Law Society’s arrangements for solicitors are one Irish example of run-off built into a profession’s own requirements; they apply to solicitors, not to businesses generally. For other businesses, whether run-off is available, for how long and on what terms varies, and it is worth raising before cover is cancelled.

Limits of indemnity

A PI limit caps what the insurer will pay, and how that cap is measured matters as much as the figure. PI limits are commonly written in one of two ways:

Per claim (often “each and every claim”): the limit is available for each separate claim.
In the aggregate: the limit is a total for all claims in the policy period, so one large claim reduces what is left for others.

Some policies combine both, as the Central Bank’s minimums for intermediaries do. Check whether defence costs are paid on top of the limit or within it. The limit worth investigating depends on the size of the contracts, what a mistake could cost a client, and any limit set by contract or regulation.

Excess on PI claims

On a PI policy, the excess is the business’s own contribution to a claim. Points to check: whether it applies to defence costs as well as compensation, whether it applies per claim or across related claims, and whether particular activities carry a higher excess. Raising it may reduce the premium, at the price of a bigger contribution on every claim.

What affects professional indemnity insurance cost?

No official Irish source publishes typical PI premiums. The factors insurers commonly consider include:

Professional activity: what the business does, and how much a mistake could cost a client;
Turnover, often split by activity where a business does several things;
Contract size and type, where relevant, including the largest contracts and any unusual terms;
Limit of indemnity and excess requested;
Previous claims and circumstances, including complaints that haven’t become claims;
Territorial and jurisdictional exposure: clients or work outside Ireland, particularly where claims could be brought under another country’s law;
Experience and qualifications of the people doing the work, and the retroactive date requested.

Our guide to what business insurance costs in Ireland explains how limits, excess and history interact with price across all types of cover.

What information may be required for a quote?

Services: a clear description of each professional activity, and the share of turnover from each
Turnover: recent years and the coming year
Clients: the kinds of client, typical and largest contract values, and any overseas clients
Contracts: standard terms used, and any liability caps or insurance requirements in them
People: qualifications, experience and memberships of those doing the work
Existing cover: current insurer, limit, excess and retroactive date
Claims and circumstances: any claims, complaints or known issues that could lead to one
Limit required, including any set by a client, contract or regulator

Questions to check when comparing PI policies

Are all your professional activities described?Work outside the described activities may not be covered. Check the wording against everything you actually do.
What is the limit, and on what basis?Per claim or aggregate, and whether defence costs are inside or on top.
What is the excess?For compensation and for defence costs, and whether any work carries a special excess.
What is the retroactive date?Does it preserve continuity with previous cover?
Where does cover apply?The territorial scope (where work is done) and jurisdiction (where claims can be brought), where the policy distinguishes them.
What is excluded?Common areas to read closely include contractual liabilities, fee disputes, specific activities and known circumstances.
How must circumstances be notified?What counts, how quickly, and to whom.
What happens if you stop trading?Whether run-off is available and on what terms.

Common misunderstandings about PI insurance

“Public liability covers professional mistakes”

Public liability is aimed at physical harm to people and their property. A client’s financial loss from advice or design generally falls outside it and is the subject of PI.

“Business or office insurance includes PI”

Office, contents or property insurance covers the business’s own assets. PI is a liability cover for claims by others. A package policy may include a PI section, but only if it is shown on the schedule.

“PI and cyber insurance are the same thing”

A PI policy may respond to a client’s claim that the business’s service caused a loss, including some technology failures. Cyber policies are typically designed around the business’s own costs after a cyber incident, such as restoring systems and responding to a data breach, and may include some liability to others. The two can overlap or leave gaps; compare the wording of each.

“Once the work is finished, the risk ends”

Under a claims-made policy, a claim about past work is usually looked at under the policy in force when the claim is made. Cancelling cover, or changing the retroactive date, can leave past work exposed.

Professional indemnity insurance: frequently asked questions

Is professional indemnity insurance a legal requirement in Ireland?

Insurance requirements can depend on the type of business, relevant legislation or regulation, professional rules and contractual requirements. A cover that is not universally required may still be required for a particular activity, profession or contract. For PI, examples include the requirements the Central Bank sets for registered insurance intermediaries and the Law Society’s arrangements for solicitors, and clients or contracts often ask for PI at a stated limit. Check with your profession’s regulator or body, and in your contracts.

Can freelancers and sole traders get professional indemnity insurance?

Yes. PI is available to sole traders, freelancers and contractors as well as firms. Freelancers working through their own company or as sole traders should describe the services they provide and the kinds of client they work for.

What is a “circumstance”, and why does it matter?

A circumstance is something that might lead to a claim, such as a client complaint or an error you have spotted. Claims-made policies commonly require circumstances to be notified during the policy period. Doing so promptly can matter to whether a later claim is covered.

Does PI insurance cover a client who refuses to pay my invoice?

That is generally not what PI is designed for. PI concerns claims against the business, and many policies exclude fee disputes. Credit control and contract terms are the usual ways to manage unpaid invoices.

What happens to my PI cover if I change insurer?

Because PI is usually claims-made, continuity matters. Check that the new policy keeps your existing retroactive date, and notify any known circumstances to the current insurer before it expires.

Is professional indemnity the same as professional liability insurance?

The terms are often used interchangeably. Some insurers use “professional liability” for similar cover, sometimes with a different scope. Compare what each policy actually covers rather than relying on the name.

Where to go next

Business insurance in Ireland
The main types of cover and how to compare policies.
Public liability insurance for small businesses
Injury and property-damage claims from third parties.
Small business insurance in Ireland
Map what your business does to cover worth investigating.

Official sources

General information about professional indemnity insurance, not personalised insurance, legal or regulatory advice. Stuama.ie is not an insurer or insurance intermediary. The scenarios are invented illustrations, not claims decisions; cover always depends on the policy wording and the circumstances. Official pages were checked on 29 September 2026.

Professional Indemnity Insurance in Ireland: What Businesses Should Know