Imagine the consulting firm you hired to restructure your processes makes an error of judgment. The advice given was wrong. The consequences cost your business half a million euros. Who pays?
This situation happens more often than you might think — and most companies discover too late that the service provider didn't have adequate cover, or that their own policy didn't cover this type of liability.
What is Professional Indemnity Insurance?
Professional Indemnity (PI) insurance covers damages caused to third parties as a result of errors, omissions, or negligence in the exercise of professional activity. It differs from general liability insurance, which covers accidental physical or material damage.
- Errors of judgment or professional advice
- Omissions in reports or opinions
- Delays causing loss to the client
- Breach of confidentiality
- Inadvertent infringements of intellectual property rights
Who is legally required to have it?
In Portugal, certain professions are legally obliged to have PI insurance: lawyers, doctors, engineers, architects, accountants, and real estate agents, among others. But the law is only the minimum.
Any company providing consulting, technology, design, communication, or management services should have a PI policy appropriate to its turnover and the nature of the risks it undertakes for its clients.
What to check in your policy
- Sum insured adequate for the largest contract you sign
- Retroactive cover (for claims arising from past work)
- Cover for employees and subcontractors
- Legal cover included
- Reporting period after policy cessation
At Adler & Rochefort, we offer a free review of your current cover and identify gaps before they become problems. Contact us to schedule an appointment.