- Professional indemnity (PI) covers financial loss a client claims you caused through negligence, an error, or a missed detail — not physical injury or property damage.
- It's written on a "claims-made" basis: the policy active when a claim is filed pays out, not the one active when the work was done. Let it lapse, and past work stops being protected.
- Cost in India typically runs ₹8,000–30,000+ a year, driven mostly by your profession, sum insured, and claims history.
- It isn't legally mandatory for most professions, but a growing number of enterprise and government contracts now require proof of it before they'll sign you.
She delivered everything on the brief. Three rounds of revisions, signed off by the client's own marketing team, invoice paid on time. Four months later, a legal notice arrived: a new marketing head at the client's company claimed the campaign had damaged the brand and wanted the fees returned — plus damages. Nothing about the work was actually wrong. It didn't matter. Defending that claim, even one built on nothing, was going to cost real money in legal fees before anyone even got near a courtroom.
This is what professional indemnity insurance exists for — not for when you're wrong, but for the moment someone claims you are.
What professional indemnity actually covers
Professional indemnity — sometimes called errors & omissions (E&O) insurance — protects you against claims that your advice, design, or service caused a client financial loss. It's distinct from general liability, which covers physical harm or property damage.
Typically covers
- Legal defence costs — even if the claim is baseless
- Damages or settlements for a genuine error, omission, or missed detail
- Breach of confidentiality — an accidental leak of client data
- Accidental copyright or IP infringement in your deliverables
- Loss of documents belonging to a client
Typically excludes
- Deliberate dishonesty, fraud, or criminal acts
- Bodily injury or physical property damage (that's general liability)
- Contractual penalties beyond what a court would actually award
- Work delivered before your policy's retroactive date
The trap almost nobody reads the fine print for
Most PI policies are written on a "claims-made" basis — meaning the policy active on the day a claim is filed against you is the one that has to respond, regardless of when the actual work happened. If you did the work in 2024 but the claim lands in 2027 after you've switched insurers, stopped freelancing, or let the policy lapse, there may be nothing there to answer it.
"I thought I'd sort it after my first big client. That was 18 months ago."
The fix is called run-off cover — an extension you buy when you close a business, retire, or step away from freelance work, specifically to keep past work covered. Almost nobody asks for it. Almost everyone should.
Who actually needs this
Freelancers, consultants, and agencies of every kind — design, marketing, IT, HR, finance, coaching. Anyone whose deliverable is advice, a strategy, a design, or a piece of code a client could later blame for a loss. Founders bidding for enterprise or government contracts, where proof of PI cover is increasingly a condition of signing. And independent professionals generally, since there's no employer's legal team standing behind them the way there would be at a large firm.
Indicative pricing
Figures above are indicative industry ranges for general awareness, not a quote. Actual premium depends on your profession, revenue, claims history, and the insurer's underwriting. AVYA doesn't recommend specific insurers or products on this page — for the cover that actually fits your situation, talk to AVYA.
None of this requires you to buy anything today. The first step is knowing what you're actually exposed to — the contracts you've signed, the clients who could plausibly come back with a claim, and what a single dispute would cost you to defend, covered or not.