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What is professional indemnity (Technology) insurance?

In today’s fast-evolving technology landscape, IT firms face a multitude of operational risks and potential liabilities that could lead to significant financial setbacks and damage to their reputation. To ensure stability and foster growth, managing these risks effectively is crucial. This article emphasizes the critical role of professional indemnity insurance in protecting IT businesses from such challenges, allowing them to innovate with confidence and reduce exposure to unnecessary risks.


Professional indemnity (PI) insurance (also known as professional liability insurance) is designed to safeguard professionals against legal expenses and claims arising from errors, omissions, or breaches of professional duty during business operations. By providing financial protection, this insurance helps absorb the impact of such claims, enabling businesses to continue their operations without disruption while addressing potential liabilities.

What is professional indemnity (Technology) insurance?
Who needs PI insurance for IT?

Who needs PI insurance for IT?

Businesses in India are quickly adopting digitization, which brings both progress and increased data risks. The IT and ITeS sectors include companies in software development, web apps, ERP implementation, IT consulting, and related services. With different business models come different risks, such as:


  • Data theft, phishing, and hacking
  • Compliance and regulatory issues
  • Cyber attacks
  • Impersonation

To reduce these risks, IT companies should invest in strong measures, perform regular software testing and updates, and maintain clear, continuous communication with clients regarding project scopes and expectations. Establishing solid risk management protocols as well as investing in a good PI Insurance for IT, will help them navigate these challenges.

Why do you need professional indemnity for IT companies?

The main objective of professional indemnity insurance is to protect IT professionals from financial losses arising from lawsuits filed by clients or shareholders. Also known as Errors and Omissions Insurance, this policy covers defense costs as well as any claim amounts the policyholder is legally required to pay to a third party.

Why do you need professional indemnity for IT companies?
Not covered in marine insurance

Why you should buy ICICI Lombard PI insurance for IT?

  • Protection Against Legal Liabilities: Covers legal expenses and liabilities for negligence, errors, or omissions in professional practice.
  • Financial Security: Shields professionals from out-of-pocket costs for legal fees, damages, and compensation in case of lawsuits
  • Enhanced Credibility: Builds client trust and boosts reputation by showcasing protection against potential legal risks.
  • Regulatory Compliance: Meets legal and industry requirements, such as those mandated by professional bodies like the Medical Council of India.
  • Peace of Mind: Reduces stress, enabling professionals to focus on their work without fear of financial or reputational damage.

Inclusions of PI Insurance for IT

Covers claims from negligence or unintentional contract breaches in providing professional or technology services, including liability for contractors.

Protects against claims arising from failures of technology products due to negligence or unintentional breaches.

Covers claims from security failures, including unauthorized access, data breaches, denial of service attacks, and malicious code transmission.

Includes liability for defamation, privacy invasion, copyright/trademark infringement, plagiarism, and negligence in media communications.

Exclusions of PI Insurance for IT

  • Claims from intentional, dishonest, fraudulent, or criminal acts.
  • Acts, errors, or omissions known or reported before policy inception.
  • Related acts occurring before the retroactive date.
  • Claims for bodily injury or property damage.
  • Liabilities assumed under contracts unless independently liable.
  • Breach of warranty, guarantees, delays, or quality failures.
  • Inaccurate pricing, quality claims, or promotional contests.
  • Obligations for licensing fees or royalties.
  • Expenses for reprinting, recall, repair, or disposal of media or products.
  • Claims from electrical or telecom failures outside operational control.
  • Claims for antitrust violations, unfair competition, or regulatory penalties.
  • Patent infringements and trade secret misuse.
  • Violations of criminal, RICO, or securities laws.
  • Claims by one insured against another under the same policy.
  • Claims involving entities with significant ownership or control by insureds.
  • Claims arising from insolvency or bankruptcy.
  • Claims related to employment discrimination, benefits, or safety violations.
  • Claims resulting from war, terrorism, or related actions.
How to raise claim under PI insurance for IT?

How to raise claim under PI insurance for IT?

  • Read the terms and conditions of your insurance policy, including coverage and claim filing procedures.
  • Notify the insurance provider promptly via phone, email, or in person at the nearest branch office.
  • Contact the claim handler assigned by your insurance provider and provide detailed information about the event.
  • Complete the claim information form accurately and submit it with required documents like Aadhar Card, PAN Card, and proof of address.
  • Provide the necessary information for the insurance provider to assess and register your claim, and receive a reference number for tracking.
  • Cooperate with the surveyor or survey team assigned by the insurer to inspect the incident scene and verify your claim.
  • Monitor the claim status by maintaining regular communication with the insurance company.
  • Await the insurance company's final decision on the compensation amount based on policy terms, surveyor evaluation, and any legal resolutions.

Frequently asked questions

1. What is Professional Indemnity Insurance?

Professional Indemnity Insurance protects professionals against legal costs, expenses, and compensation if they cause financial loss to a client due to errors, omissions, or negligence in their advice or services.

2. Is Professional Indemnity Insurance mandatory?

It is not mandatory for all professions in India. However, it is highly recommended for professionals like doctors, lawyers, architects, and accountants. Certain regulatory bodies or professional associations may require it for their members.

3. Who can take Professional Indemnity Insurance?

This insurance is suitable for a variety of professionals, including
  • Medical Practitioners
  • Legal Professionals
  • Financial Consultants
  • IT Professionals
  • Architects
  • Interior Designers
  • Chartered Accountants
Product Product Code UIN no.
Professional Indemnity (Technology) Insurance 4011/E IRDAN115CP0012V01200607

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