Indemnity insurance in the UK means one of two quite different products, and which one is meant is decided entirely by who asked. A client, a professional body or a broker means professional indemnity. A conveyancer or an estate agent means a legal indemnity policy over a property defect.
Professional indemnity
An annual business policy covering the financial loss a client suffers because your professional work or advice was wrong, plus the cost of defending it. Written on a claims made basis, so it must be kept continuous long after the work ends.
The conveyancing legal indemnity
A one off policy bought at a sale over a specific defect: a missing building regulation certificate, a restrictive covenant, an absent landlord on a leasehold title, an informal right of way. It is inexpensive, it runs indefinitely, and it passes with the property to the next owner.
How to tell them apart
The requester. A conveyancer, a buyer's solicitor or a lender means the property policy. A client contract, a professional body, a recruitment agency or an insurance broker means professional indemnity. The two are bought from different places entirely.
Why the same word is used
Both are promises to make good a loss, which is what indemnity means in ordinary legal language. Insurance borrows the word for two unrelated situations, and contracts borrow it again for indemnity clauses that are not insurance at all.
Questions people ask about what is indemnity insurance uk
Which product is meant?
Professional indemnity if a client, professional body or broker asked. A conveyancing legal indemnity if a conveyancer or lender asked.
Is the property one expensive?
Usually modest, because the risk of the defect producing a loss is remote, and it is a one off premium rather than an annual one.
Does an indemnity clause in a contract mean insurance?
No. It is a promise between the parties. Whether insurance responds to it is a separate question.