Why Professional Indemnity Insurance Matters More Than You Think

Claims are something we deal with every single day. With years of experience handling all types of claims, we’ve seen firsthand how Professional Indemnity Insurance (PII) can make or break a business when something goes wrong.

Many people are hesitant to take out professional indemnity cover because they believe it suggests they’re expecting to make mistakes. But that couldn’t be further from the truth. In fact, larger businesses often insist their suppliers have professional indemnity insurance—alongside other covers—before they’ll even consider working with them.

The Reality of Professional Indemnity Claims

While it’s true that it’s unlikely your company will face a claim, it can be incredibly expensive and stressful if you ever do. Even the most careful professionals can face legal action over alleged negligence, misrepresentation, or poor advice.

One of our clients was once sued for an amount equal to their entire business turnover—not half of their profit, but the full turnover. Thankfully, they had the foresight to invest in the right protection with our guidance.

The claim itself, brought by an unhappy third party, had little merit. Yet, as is often the case, the complainant was encouraged to push forward, likely motivated by a legal advisor seeking their own gain.

How Insurers and Adjusters Handle Claims

When the claim was reported, the insurer quickly appointed a law firm—sensible enough. However, they also brought in another intermediary known as a loss adjuster. These firms often use impressive-sounding titles, but their role is clear: to reduce the insurer’s payout.

We met with this loss adjusting firm twice during the claim process. Their proposed “strategies” were all focused on lowering the insurer’s overall costs. Unfortunately, many of these strategies could have left the policyholder exposed to uninsured costs—something they seemed oblivious to when we raised it.

It became apparent that while the insurer insisted their goal was to protect the policyholder, the adjuster’s actions told another story. Their priority was saving money, not safeguarding the client.

Who’s Really on Your Side?

When a claim occurs, policyholders naturally expect everyone on their side—the insurer, the solicitor, the broker—to truly be on their side. Sadly, our experience shows that’s not always the case.

We often receive calls from business owners who feel let down by their insurer or broker, unsure who’s genuinely advocating for them. They’re not being naïve—just deceived by a system that doesn’t always put their best interests first.

This is where empathy becomes essential. Claims can be overwhelming, emotionally draining experiences. A good broker steps in not just to manage the process, but to remind all parties that the only person who truly needs protecting is the policyholder.

The Solicitor’s Dilemma

In our client’s case, the appointed solicitor had two clients:

• The policyholder (our client), who paid the insurance premium.
• The insurer, who paid the solicitor’s bill.

It’s a tricky position for any legal professional. While solicitors are meant to represent both parties fairly, the financial relationship with the insurer can blur the lines. That’s why having a strong, experienced broker involved is vital—to ensure the solicitor truly protects the policyholder’s interests, not just the insurer’s balance sheet.

Top Tips

✅ 1. Don’t assume it won’t happen to you. Even careful professionals can face claims from unreasonable clients or third parties.

✅ 2. Choose your broker wisely. A good broker will guide you through the claims process, challenge unfair strategies, and make sure your rights are protected.

✅ 3. Keep clear records. Accurate documentation and communication logs can make a world of difference if a claim arises.

✅ 4. Ask questions. Understand who’s representing you, who’s paying them, and where their loyalties lie.

✅ 5. Stay calm and informed. Claims are stressful, but the right cover and the right people in your corner make all the difference.

Wrap Up

Professional indemnity insurance isn’t about expecting mistakes—it’s about protecting yourself from the unexpected.

When claims occur, remember that not everyone in the process shares your priorities. Insurers want to limit costs; adjusters want to impress insurers; solicitors often balance two masters. The only person truly focused on you should be your broker—someone who understands the system, speaks the insurer’s language, and fights to make sure you get the protection you paid for.

So, if you haven’t reviewed your professional indemnity cover recently, now’s the time. Don’t wait until a claim hits to discover who’s really on your side.

Get professional indemnity insurance advice tailored to your industry — contact our team today for a no-obligation review.