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Project Management Insurance

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Covers legal claims and errors
Protects project flow and income
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What is Project Management Insurance

Project management is an ever-changing field, so safeguarding your business with the right insurance is crucial. Project management insurance can provide coverage that is specific to the risks you might have to face. It allows you the peace of mind to focus on what you do best.
Insurance isn’t just a formality—it protects project managers from legal claims, ensures compliance, and supports resilience. Whether handling schedules, costs, or planning for buildings and infrastructure, professional indemnity insurance offers crucial protection against compensation claims.

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What is covered in Project Management Insurance??

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Careless act, mistake, or omission

Covers accidental errors that cause project delays or losses.

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Confidentiality breach

Covers accidental leaks of private information.

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Deception and dishonesty

Protects against employee fraud (if not knowingly allowed).

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Subcontractor negligence

You’re covered if hired subcontractors make errors.

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Legal decisions under HGCRA

Covers losses tied to adjudication rulings in construction disputes.

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Property damage/bodily injury

Covers harm caused by professional oversight.

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Intellectual property violation

Protects against unintentional use of others’ content (excluding patents).

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Slander

Covers unintended defamatory statements made during work.

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Data/document loss

Covers loss or damage to client files or information.

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Non-refundable costs

Reimburses you or clients for unrecoverable project expenses.

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Computer virus transmission

Covers liability if your systems spread malware

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Defence costs

Pays for legal defence in covered claims.

Why do I need Project Management Insurance?

Running a project management business can be challenging. Insurance helps manage the risks that might otherwise leave them financially vulnerable. Comprehensive project management insurance is a great way to protect business interests! This insurance can be customised to fit unique business needs.

Responsibilities of a Project Manager:

A project manager is responsible for many things. Think about deadlines; if you are not vigilant enough, they will pass you by without warning. However, a project manager is always there to keep an eye on such tricky things.
Similarly, a project manager is responsible for planning and handling the budget. However, a slight oversight can lead to significant financial losses for your clients. Typically, you are responsible for such accidents. To address these situations, you might have to pay out of your pocket.
However, if you have professional indemnity insurance for project management, it’ll deal with this mess for you. The insurance also pays for a solicitor to handle the legal aspects of the case. In addition to that, it also pays for the compensation costs.
Furthermore, a project manager’s responsibility on a particular site is dependent on:

The terms of the appointment
The terms of engagement of the other consultants on the project
The principal contract
The demands of the particular project.

Here are some scenarios that illustrate why project manager insurance is necessary:

Professional Indemnity Insurance

A project manager forgets to administer a crucial step during development. As a result, the client loses out on a timely completion. Because of this, they face a huge financial loss. However, with project manager professional indemnity insurance, it will help in case of a lawsuit.

Employer’s Liability Insurance

Unexpected accidents can happen anytime. For example, if a project assistant trips over a file and gets injured, they may sue you for unsafe conditions. Employer’s liability insurance covers such claims and related legal costs.

Public Liability Insurance

If your systems are hacked and client data is stolen, cyber insurance helps manage the damage. It covers data recovery, legal fees, forensic support, and compensation costs—protecting both your finances and reputation.

What Are The Different Types Of Project Management Insurance?

Public Liability Insurance:

When you travel for work or host guests at your office, it is essential to carry public liability insurance. This insurance helps defend against claims related to harm to individuals and property in public settings.

The purpose of this insurance is to shield you and your company from compensation claims. This insurance can provide you with the following coverage:

Injury compensation – when you or your company harms a member of the public, supplier, or bystander.
Appropriate damage compensation
Legal costs related to claims for injuries or damages

Consider this real-world scenario where a project manager hosts a client presentation at their office. While discussing business matters, a client trips and falls because of unsecured cables. It results in a wrist fracture. Now, the client files a claim against you, demanding reimbursement for

Medical costs
Emotional damages
Loss of wages during recovery

The public liability insurance will manage it. Without this protection, even a minor accident could result in a financial loss. Consequently, it may jeopardise both the current projects and the business itself.

Employers’ Liability Insurance:

If an employee sues your company for damages, your company is covered by employers’ liability insurance. It is required by law for UK companies that employ people.
This insurance covers claims from workers who have had workplace accidents, been hurt, or been gravely ill. For high-risk occupations such as construction and other trades linked to industry, this is even more crucial.
Imagine a project coordinator slips and falls while setting up an event space. Resultantly, they break their wrist. The injury requires surgery and eight weeks of recovery time. Workers’ compensation would cover:

All medical treatment costs
Rehabilitation expenses
Lost wages during recovery
Disability benefits if needed

The International Labour Organisation (ILO, 2016)) reported that 43% of small businesses lack adequate coverage which keeps them open to significant risks.

Office And Property Insurance

Office and property insurance covers damage to physical assets that are essential for your operations. This comprehensive coverage protects both office premises and the equipment necessary for project execution.
Office and property insurance can be further extended into two types of insurance:

Portable Insurance:

Devices and technological equipment used outside of the workplace, such as laptops, tablets, projectors, etc., are covered by portable insurance.

Content Insurance:

This combined policy includes different types of property protection under a single umbrella. They can protect your office from a range of threats. It typically includes:

Business contents insurance
Commercial property (buildings) insurance
Equipment breakdown (optional cover)

These policies help you stay protected from damage to your office. Similarly, they provide coverage for the loss, damage or theft of equipment and furniture inside the office building. They also protect against various natural threats like fire, flood, and storm.

For example, a project management firm experiences a burst water pipe. It floods their office over a weekend. The damage affects workstations, servers containing critical project files, and specialised equipment. Now, the office and property insurance would cover the following for you:

Equipment repairs
Replacements
Rebuilding work
Damage costs

However, there are certain limitations to this policy. Here are some of them:

What’s Excluded From Office And Property Insurance?

Wear and tear-related damage. Other damages like natural flaws, decay, mould, fungus, rodents, or infestation or any slowly developing cause.

Claims to any item resulting from its breakdown

Claims resulting from a rise in the water table

Claims from coastal or river erosion

Loss brought on by dishonesty or fraud committed by any of your employees, directors, or partners, unless the insurer is informed within ten working days of the finding

Damage that occurs when the property is vacant, unless the insurer agrees in writing

Business Interruption Insurance:

Having business interruption insurance allows you to continue working even if your office is closed. You are covered for the expenses of moving your business and for any lost income during that period. Similarly, you will be covered regardless of the cause, like fire or water damage.

Your office gets damaged due to a severe storm. It becomes unusable for three months, hence disrupting operations. Business interruption insurance would provide:

Replacement income based on historical earnings
Continued payment of fixed expenses like salaries and rent
Costs associated with temporary relocation
Extra expenses required to resume operations

Directors’ And Officers’ Insurance

Your company’s senior management is covered by directors’ and officers’ insurance. Regulators, shareholders, and rivals might all accuse you of not managing your company responsibly. This insurance would cover you for the defence expenses and any necessary compensation.

Consider a scenario where your firm’s executive makes a strategic decision to pursue a high-risk project. However, the project ultimately fails. Now the shareholders sue the executive, claiming mismanagement of company resources. D&O insurance would cover the legal defence costs and potential settlements. Hence, it will protect the executive’s assets.

Professional Indemnity Insurance:

The insurance addresses risks associated with complaints regarding professional guidance or service execution. Professional Indemnity Insurance provides vital protection for project managers who offer consultation as part of their work.
It provides coverage against :

Slander
Violations of intellectual property
Data or document loss
False statement or misrepresentation
Workers dishonesty
Dissemination of viruses
Confidentiality violation
Malfunctions in equipment

For instance, you advise a client to use an explicit production system. However, the client finds that the implemented approach raises costs instead of decreasing, as promised. Now, they sue you for negligent advice.
Professional indemnity insurance would cover the legal defence and any resulting damages. Hence, it will protect your financial stability.

Commercial Legal Expenses

Legal expenses insurance will protect project managers against various tax and legal issues they may encounter due to their profession. These issues are usually not covered by professional indemnity or public liability.

Here are some example scenarios where legal expense insurance is vital:

Scenario	Description	How Legal Insurance Helps
Contract Dispute	Client claims project deliverables don’t meet specifications	Covers legal representation to defend pays for mediation or arbitration costs
Intellectual Property Claim	Third party alleges your project methodology infringes on their copyrighted process	Pays for intellectual property attorneys to defend against allegations covers licensing fees if required
Employment Tribunal	Team member files wrongful termination claim	Provides employment law specialists covers representation at tribunal hearings
Regulatory Investigation	Government agency investigates compliance issues in a regulated project	Covers legal guidance during the investigation pays for representation in regulatory proceedings
Tax Dispute	Tax authority challenges project-related expense classifications	Pays for tax specialists to represent your position covers audit representation costs

Optional Upgrades For
Project Management Insurance

Contract Works Insurance

Contract Works insurance includes coverage for materials associated with the contract. It also covers both temporary and permanent work done to meet the agreement requirements.

For example, a multi-story office building project is almost near completion. However, an overnight storm damages the whole structure. If you have the right insurance, it will compensate for the loss.

Cyber Liability Insurance

This insurance shields you from risks like data breaches or cyberattacks, crucial in today’s digital age.
For example, a project manager coordinating a healthcare system stores temporary backup files on an unsecured server. Hackers access patient records, leading to a significant data breach. It affects thousands of individuals. Now the manager has to face regulatory fines and legal claims.
Cyber liability insurance would cover:

Notification costs to affected individuals
Credit monitoring services
Legal defence expenses
Regulatory fines and penalties
Crisis management and public relations support

Occupational Personal Accident Cover

Although it may not seem necessary, occupational personal accident insurance could be a lifesaver for project managers. In business insurance, personal accident coverage is intended to compensate for work-related injuries. It works just like an employer’s insurance if an employee were hurt on the job.

Now, imagine you need to go to the site of the civil engineering project. There, you trip on some equipment and break your hip. You need several operations and constant rest. To save you from going without a paycheck during this period, your personal accident insurance would pay out a weekly amount.

What Types Of Professions Are Covered Under Project Management Insurance?

If you are responsible for planning, organising or directing the completion of projects, you must consider this insurance. This could apply to the following professions:
Both ICA and non-ICA accountants

Architects
IT managers
engineers
Property managers and surveyors
RICS Surveyors

Steps To Take Before
Buying Project Management Insurance Workers

Here are some steps you should consider:

Make sure you have thoroughly assessed the needs of your business to obtain complete coverage.
Before you sign the contract, thoroughly study all the material related to the liability insurance you plan to get, if any.
Choose the right limit of indemnity that won’t leave you or your business at risk.
Calculate a precise replacement value for your tools and property. So that, in the event of an emergency, you can replace the essential tools.
It is legally required to obtain employer’s liability insurance if you employ individuals. You risk incurring hefty fines if you don’t.
Regardless of legal requirements, ensure you have the proper insurance to protect your company. It is what truly matters.

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How Much Cover Do You Need?

The following factors determine how much coverage your company requires:

The Kind Of Clients You Serve

The first step in assessing how much coverage you need is to ask your clients. You should be well aware of their expectations. Moreover, this type of policy allows them to feel confident.

Otherwise, think of how much it would cost to avoid a worst-case scenario? Legal fees and incurred losses have to be part of these costs, too. This number can also give you an idea of how much professional indemnity insurance you should have.

The Nature Of Your Employment

Asking yourself, “Do I possess adequate staffing capacity and cash flow to rectify significant errors?” is another important consideration. If the response is no, more coverage could be advantageous for your company.

Companies You Collaborate With

Additionally, it is frequently more affordable to think about the coverage you will require first. You can look at the insurance policies of companies that you collaborate frequently with and then decide. This is the most effective method to guarantee that you are safe from any situation.

How Much Does Project Management Insurance Cost?

The following key aspects are shared with insurance companies to understand the costing for the best insurance plan for your business:

Size of Company

Income, Directors & Staff

The overall size of your business is based on gross annual income and the total number of directors, partners, and employees. This helps insurers assess the scale of risk associated with your operations.

Business Size Annual Income Team Structure

Qualifications & Experience

Skills & Years in Practice

Insurers may request resumes or experience summaries to evaluate your background in the field. The number of relevant years in practice is key to determining your insurance eligibility and rates.

Experience Credentials Professional History

Type of Work

Risk Level by Profession

Certain professions are classified as low or high risk. Insurers will evaluate the nature of your work and how much revenue is generated from each activity to determine the level of exposure.

Risk Category Revenue Streams Industry Type

Claims Experience

Past Claims & Risk Practices

This highlights the kind of work your business engages in and your history of past claims. It reflects the quality of internal processes, staff competence, and risk management strategies.

Claims History Risk Management Work Quality

Frequently Asked Questions

Does hiring contractors mean that I don't need employers' liability insurance?

No, however, employers who directly hire employees must have employers’ liability insurance. If you hire contractors, ensure that they have their insurance, as you might still be held partially liable.

Is temporary insurance valid on any car?

Most cars are covered under this type of insurance. However, rentals, imported cars, and vehicles over a certain weight or value limit and significantly modified, are excluded.

What kind of insurance does a project manager need the most?

Professional indemnity insurance is crucial because it guards against claims of negligence or errors. Public liability insurance is another vital tool for defending against third-party lawsuits.

Can I get project manager insurance if I'm self-employed?

Regardless of whether you work as a project manager for a company or yourself, you will need insurance. It helps you by safeguarding your source of income. You might require a policy that offers a variety of coverage alternatives, like:

Professional indemnity
Employer’s liability
Property damage coverage
Public liability insurance

What is the difference between public liability insurance and liability insurance for employers?

Public liability insurance	Liability Insurance for Employers
Public liability insurance covers third-party property damage or injury that occurs as a result of your business activities	Employers’ liability insurance provides cover for your employees if they suffer an injury or illness as a result of their work.
It is optional (though highly recommended)	By law, you’re required to have employers’ liability insurance if you have employees

Can I get a Project Manager business insurance with multiple types of insurance in one policy?

You can easily cover all of your insurance needs with a single price and policy. As a project manager, you need to mention the insurance you need to your insurance firm. You will get a customised policy tailored to your needs.

What if I had continuous PI insurance in the past?

You can have Retroactive Cover in place if you have had continuous PI insurance in the last years. If you get insurance by a different provider, retroactive cover can shield you from any claims related to work that has already been done. You need to ensure that your professional indemnity insurance doesn’t lapse. If it does, you will not be eligible for Retroactive Coverage.

Is professional indemnity insurance compulsory?

Although it is not compulsory under law, some professions require it due to the requirements of clients. Some contracts may also require you to have it before you’re able to start a job.

Can I include personal injury insurance?

Yes, you can include personal injury coverage in thist insurance. You will be covered for personal injuries and in case of unfortunate accidents like death. You are also provided a lump sum amount to compensate for the lost wages during the recovery.