Professional Indemnity & Liability Insurance in Singapore

Professional Indemnity Insurance (PII) protects businesses and professionals from claims of negligence, errors, or omissions in their services. It covers legal costs and compensation in case a client suffers financial loss due to advice or services provided. In Singapore, PII is essential for professionals such as lawyers, consultants, architects, and accountants, as it ensures their financial security and helps maintain their reputation. Professional indemnity insurance and professional liability insurance are often used interchangeably and serve similar purposes in offering protection against claims related to professional conduct and advice.

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Types
Does my business need Professional Indemnity Insurance?
Cost
What does it cover?
Types
How much does it cost?

Common risks covered by PII include:

Malpractice:

Malpractice:

Coverage for errors or negligence that result in harm or financial loss to clients due to mistakes made during the provision of professional services.

Negligence:

Negligence:

Protection against claims arising from failures to exercise proper care, skill, or judgment in providing services or advice.

Contract Breaches:

Contract Breaches:

If a professional fails to fulfil a contractual obligation or violates terms agreed upon with a client, PII can help cover associated legal fees and any resulting compensation claims.

Professional Indemnity Insurers

Who Needs Professional Indemnity Insurance in Singapore?

Professional Indemnity Insurance is not legally required in Singapore. However, if your business provides consultancy, professional services, advice, or handles confidential data, then this insurance plays an important role in managing your exposure to liability.

It offers financial protection if a client claims loss or damage due to your professional error, omission, or negligence. Here's how indemnity insurance applies to key professions in Singapore:

Risk:
Design flaws, regulatory compliance issues, and structural miscalculations can lead to costly project delays, legal claims, and even safety hazards. These errors may cause client downtime and lost revenue.

Coverages needed:
Professional Indemnity Insurance helps protect against legal costs, settlements, or damages resulting from claims of negligence, error, or oversight in your professional services. This is particularly crucial in Singapore, where many professionals are required to provide proof of coverage when renewing their licences. Additionally, consider getting Business Insurance as it also offers broader protection for your company’s assets and operations.
Risk:
Misdiagnoses, medication errors, and lapses in patient care may result in malpractice claims or disciplinary action by regulatory boards.

Coverages needed:
Indemnity insurance covers legal defence costs and compensation claims arising from errors or omissions in professional medical services. It is mandatory for doctors practising in Singapore and forms part of regulatory compliance.
Risk:
Incorrect legal advice, missed deadlines, or administrative errors can lead to financial loss or reputational damage for clients, triggering legal action.

Coverages needed:
Professional indemnity insurance protects legal professionals against the financial impact of defending against claims and potential settlements. It's also a requirement for practising lawyers in Singapore.
Risk:
Misstatements in financial reporting, tax miscalculations, or audit oversights can result in serious client losses, penalties, or regulatory investigations.

Coverages needed:
Indemnity insurance is essential to manage the risks of financial liability, especially when handling sensitive financial data. In Singapore, professional indemnity cover is often required for practising public accountants.
Risk:
Inaccurate business advice, strategic missteps, or failure to meet deliverables can result in client dissatisfaction, project losses, or breach of contract claims.

Coverages needed:
Indemnity Insurance for consultants in Singapore provides protection from legal claims related to advisory services. This includes coverage for legal fees, settlements, and reputational support during a dispute. Additionally, obtaining a Business Insurance will provide further protection for your company's operations and assets, ensuring comprehensive coverage for your business needs.
Risk:
Intellectual property disputes, publishing errors, or campaign misrepresentation may expose marketing firms to client lawsuits or reputational claims.

Coverages needed:
Professional indemnity insurance covers legal liabilities arising from errors in advertising content, design work, or communication strategies.
Risk:
Inaccurate investment recommendations, product misrepresentation, or administrative oversight can lead to significant client losses and regulatory scrutiny.

Coverages needed:
Indemnity Insurance helps protect against claims of negligence or professional errors, supporting professionals in maintaining client trust and fulfilling compliance requirements. Directors and Officers Insurance can further safeguard your company's leadership by covering personal liability for decisions made in their roles.

How Professional Indemnity Insurance Helps Your Business

Here's how PII can benefit your business:

Financial protection

Financial protection

Covers the costs of lawsuits and compensation claims arising from errors, negligence, or omissions in your professional services.

Reputation management

Reputation management

Helps protect your business’s reputation by handling claims professionally and preventing long-term damage caused by allegations of malpractice or negligence.

Contractual requirement

Contractual requirement

Many clients, particularly in sectors like law, consulting, and architecture, require service providers to have professional liability insurance before entering into contracts, ensuring both parties are protected.

Steps and Documentation Needed in the Event of a Claim under Professional Liability Insurance

If a client files a claim against you for professional misconduct or errors in your services, having the right documentation and following the correct steps is crucial. Here’s a guide to help you navigate the process and ensure that your professional liability insurance provides the protection you need:

The first step is to promptly notify your insurance company of the claim. Most professional liability insurance policies require you to inform them as soon as you become aware of any potential claims or lawsuits. Delays in reporting may impact the coverage.
Gather all relevant documents related to the claim, such as emails, contracts, correspondence with the client, and any reports or evidence that demonstrate the service provided. Clear documentation will help build your case and support your claim under professional liability insurance.
Familiarise yourself with the terms and conditions of your professional liability insurance policy. Understanding the specific coverage limits, exclusions, and the claims process will allow you to manage expectations and follow the proper procedures.
Your insurer will likely conduct an investigation to determine the validity of the claim. Cooperate fully by providing any requested information or clarification. This will help ensure a smooth claims process.
Maintain detailed records of all communication with both the client and your insurance provider throughout the claims process. This documentation is vital for resolving disputes and ensuring the claim is handled efficiently.

By following these steps and maintaining accurate documentation, you can ensure that your professional liability insurance coverage offers the necessary protection against claims related to your professional services.

What does Professional Indemnity Insurance cover?

A systems integrator faced legal action after a poorly executed CRM implementation led to significant disruption for the client over several weeks, culminating in a large amount of compensation claim. This shows the importance of Professional Indemnity Insurance in protecting against various risks, including:

Professional Negligence

This covers financial losses or reputational harm caused by errors or omissions on your part, or by providing incorrect information or advice that results in a client’s financial loss. It also extends to situations where a project overruns on budget, and the client seeks compensation as a result.

Acts of Defamation

This includes any libellous or slanderous statements made about a customer or client that could damage their reputation.

Legal Costs

Professional Indemnity Insurance also covers legal expenses, including defence costs and any compensation awarded to the defendant.

Loss of Documents

This provides protection against the destruction, damage, loss, distortion, erasure, or mislaying of Third Party Documents for which you are legally responsible.


Case Scenario:
Imagine a scenario where a software consultancy firm implemented a new customer relationship management (CRM) system for a client. The system failed to integrate smoothly, causing delays in the client’s operations. As a result, the client suffered significant financial losses and filed a $50,000 compensation claim. In this case, Professional Indemnity Insurance would cover both the compensation amount and the legal defence costs, ensuring the systems integrator is protected from the financial and reputational fallout.

How much does Professional Indemnity Insurance cost?

The costs associated with Professional Liability Insurance vary in accordance with the specific policy chosen. Each policy is created based on the professional advice, products, or services your company provides.

  • Type of industry and services offered

  • Limit of liability or deductible

  • Business practices / exposures

  • Portfolio size

  • Claims history

How eazy Supports You with Professional Liability Insurance

At eazy, we specialise in simplifying liability insurance for companies in Singapore. Understanding the complexities of professional liability insurance can be daunting, but our team is here to guide you through every step of the process.

Our unique approach centres on offering customised policy options, ensuring that your coverage is tailored to fit the specific needs of your business. We provide clear guidance throughout the process, making it easier for you to navigate the details and ensure you're getting the protection you need. Additionally, we partner with leading insurers from Singapore's top brands, giving you access to reliable and reputable coverage options.

Managing your professional liability insurance is straightforward and hassle-free. Just contact us today to learn how we can support your business.

Frequently Asked Questions

About Professional Indemnity Insurance In Singapore

  • PI insurance in Singapore may not cover fines, penalties, employee injury, or any claims made for incidents before the policy period.
  • PI insurance is expensive because of its broad coverage. You can face legal liability arising from professional negligence, depending on the nature of your profession, the size of the business, coverage level, and other factors that may contribute to risk exposure.
  • Public Liability (PL) insurance covers claims made by the public against damages, injury, illness, or loss. Meanwhile, PI insurance covers policy claims made by customers or clients involving professional negligence or mistakes.
  • PI insurance allows you or your business to recover financially from any incident resulting in money loss or civil damages. It can also cover your legal defence fees, compensation claims, or settlements as long as your policy covers them.
  • PI policy periods can last anywhere between 6 and 10 years, depending on the nature of your business activities.
  • No, E&O insurance is not designed to cover claims arising from intentional wrongdoing or fraud. Such claims may be excluded from the policy's coverage.
  • The claims process for E&O insurance in Singapore can vary depending on the insurance provider and the policy's terms and conditions. Typically, the insured professional needs to report the claim to the insurance provider as soon as possible and provide details such as the date and time of the incident, the parties involved, and any supporting documents. The insurance provider will then assess the claim and provide compensation if the claim is approved.

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