Professional indemnity insurance (PII), also known as errors and omissions insurance, is one of the most important – and most overlooked – tools for protecting your business.
If you provide expert advice, manage high-stakes projects or deliver specialized services, even one small misstep can lead to a costly claim. Whether the issue was a genuine mistake or a misunderstanding, your client could hold you responsible for their financial loss.
That’s why professional indemnity insurance is so important. It covers legal fees, settlements and reputational damage when things go sideways. And in industries where you’re providing any type of advice or consultative work, it’s often a non-negotiable part of doing business. This can include any architectural or engineering design work or advisory services.
But here’s the thing: not all coverage is created equal.
A basic policy might satisfy contract terms. But a tailored, strategic one? That’s what actually protects your reputation, your livelihood and your long-term value.
At its core, Professional Indemnity Insurance protects you from the financial fallout of a professional mistake. That means not just the error itself – but the ripple effects it can cause, like project delays, added costs and damage to client trust.
It kicks in when a client claims your advice, service or deliverable caused them financial harm. Maybe it was a subcontractor’s mistake. Maybe a crossed wire in communication. But in the end, the blame often lands on you – and you could be paying out of pocket just to defend your name.
According to the Insurance Information Institute, Professional Indemnity Insurance generally comes in two forms:
Most PII policies are claims-made – so understanding your timeline and adding run-off coverage when needed is critical to staying protected.
Professional Indemnity Insurance is built to protect you from the risks that come with doing expert work – especially when expectations are high and margins for error are thin.
Here's a closer look at what it typically covers and where it draws the line.
Learn more about other key types of insurance.
Professional Indemnity Insurance is an effective tool, but it only works if it’s built for the realities of your business. Too often, policies look fine on paper but fall short when it really counts. Here are the gaps we see most often:
Most PII policies only apply if the claim is made while the policy is active – not just when the work was done. Cancel, retire, or sell your business without run-off coverage in place, and you could lose protection for past projects.
Tailored fix: If you’re nearing an ownership or winding down operations, make sure your policy includes proper run-off coverage to protect work you've already completed.
Claims often fall apart in the fine print – not because of what happened, but because your contract language and your coverage weren’t aligned. If scopes shift or roles aren’t clearly defined, you could find yourself unprotected.
Tailored fix: Coverage should reflect the actual structure and scope of your work, including subcontractor relationships, project complexity and legal jurisdiction.
If you’re regularly signing high-value contracts, a $500K limit likely won’t cut it. You could be technically “covered,” but still left financially vulnerable.
Tailored fix: Limits should grow alongside your contracts. A tailored policy benchmarks your exposure against real project values and industry standards.
The bottom line is that real protection doesn’t come from checking a box. It comes from a policy that’s shaped around how your business actually operates and where your risks truly live.
Even the best Professional Indemnity Insurance is reactive. It helps you recover after a claim – but what keeps those claims from happening in the first place?
That’s where strategy comes in.
At Ellerbrock-Norris, we don’t just sell policies. We take a holistic approach to risk that helps you strengthen the systems that prevent issues before they become a problem in the first place.
We do this by addressing the 10 key areas of risk, which includes:
When these pieces work together, your insurance becomes a true safety net – not your first line of defense. Because real protection isn’t just about avoiding claims. It’s about building a business that’s ready for whatever comes next.
Ready to take your risk management to the next level? Let’s talk.