Professional indemnity for consultants, IT firms and agencies: cover, price and client-contract traps

Professional indemnity insurance for a consultant, IT services firm or agency generally costs between 0.2% and 0.5% of annual turnover, with a floor of a few hundred euros for a sole consultant and several thousand euros once the firm bills more than one million euros. Price matters less, however, than three clauses in your client contracts: the liability cap you accept, the way you subcontract, and the status of your freelancers. That is where the claims your insurer will pay, or refuse, are decided.

What is professional indemnity insurance for a knowledge-services provider?

Professional indemnity insurance (RC Pro in France) is the policy that covers the financial consequences of a fault, error or omission committed while delivering a service, when a client seeks compensation. For a consulting firm, an IT services company (ESN) or an agency, the typical loss is neither bodily injury nor property damage: it is a pure financial loss, known in French policies as a "non-consequential intangible loss".

A non-consequential intangible loss is a loss of money that does not stem from any physical damage or injury: an e-commerce site down after a failed release, a flawed strategic recommendation. In a professional indemnity policy, this item almost always has its own sub-limit, often well below the general limit, and that is the figure that matters to you.

Who is legally required to hold professional indemnity insurance in consulting, IT and communications?

Almost no one. Unlike regulated professions, consulting, software development, managed IT services and advertising are not subject to any statutory insurance requirement in France. The requirement comes from your clients: a large corporate or a bank demands, in its framework agreement, professional indemnity cover with specific limits, and its supplier-onboarding platform blocks the purchase order until the certificate is uploaded. In an IT services market that Numeum valued at €34.3 billion in 2025, down 1.8%, margin pressure makes this clause all the less negotiable.

How much does professional indemnity insurance cost for a consultant, IT firm or agency in 2026?

The premium applies a rate to declared turnover, adjusted for the exact activity, the share of foreign clients, claims history and the limits requested. Rates observed on the French market range from roughly 0.25% for communications to 0.45% for IT, with a minimum premium of €150 to €400.

North American clients and hosting or production managed-services activities fall outside these ranges.

What does professional indemnity insurance actually cover for a consultant or IT firm, and what does it exclude?

The core cover is professional fault: wrong advice, a bug shipped to production, a delay attributable to the provider, loss of entrusted data, unintentional infringement of a third party's intellectual property, disclosure of confidential information. Defence costs are added, and often general liability too.

Exclusions are just as decisive. Unless expressly extended, the following are not covered: the cost of redoing the work (the insurer compensates the client's loss, not your time), contractually agreed late-delivery penalties, performance guarantees accepted beyond what ordinary law would impose, intentional fault and administrative fines. For a vendor selling its own software rather than a service, the logic differs: see our article on professional indemnity for SaaS vendors.

An unlimited liability clause does not make you a more reliable provider: it makes your balance sheet your client's first line of insurance.

Why is the unlimited liability clause the real risk?

Because your insurance policy has a cap and your client contract no longer does. The French Civil Code allows parties to limit the compensation due for non-performance: article 1231-3 confines damages to the foreseeable loss except in cases of gross or wilful misconduct, and article 1170 only voids a clause that "deprives the debtor's essential obligation of its substance". The Cour de cassation settled the point in the Faurecia ruling of 29 June 2010 (no. 09-11.841): a negotiated, non-derisory cap is valid even when it applies to the provider's main obligation.

In other words, the law lets you cap. Usual caps run from the contract value to twelve months of fees, with indirect losses excluded. The problem lies in contracts where the cap is absent or "unlimited" for certain heads of loss (data breach, intellectual property, confidentiality), precisely those to which your insurer applies a sub-limit. With a €500,000 intangible-loss sub-limit and unlimited liability for confidentiality, you alone bear everything above that.

Align the contractual cap, the insurance limit and your real financial capacity; we detail this negotiation in our article on insurance clauses in enterprise contracts.

How do subcontracting and freelancers change your cover?

Towards your client, you answer for your subcontractors as for your employees: the freelancer's fault is your fault. Three precautions. Check that your policy covers subcontracted work, which is not automatic. Require an up-to-date professional indemnity certificate from every freelancer, with limits consistent with yours. Finally, comply with the duty of vigilance under article L. 8222-1 of the French Labour Code: for any contract of at least €5,000 excluding VAT, collect the Urssaf vigilance certificate every six months, or be held jointly liable for the subcontractor's social contributions.

Freelancers working through an umbrella company (portage salarial) are a special case. Under articles L. 1254-1 et seq. of the Labour Code, the consultant is an employee of the umbrella company, which invoices you and must hold a financial guarantee of at least 10% of its previous year's payroll. It is the umbrella company that takes out the professional indemnity cover for its employees: the certificate to request is its own, checking that its limits and activities match the assignment.

How do you structure professional indemnity cover for a growing IT firm or agency?

Start from the contracts, not the rates. Reread the liability clauses of your five largest clients and set the insurance limit on the most demanding one, with an intangible-loss sub-limit close to the general limit. Declare all your actual activities, including those that have emerged since inception (hosting, data, generative AI): an undeclared activity is an uncovered activity. Add separate cyber cover as soon as you access your clients' systems: professional indemnity covers the fault, not the attack you suffer. Finally, update the declared turnover every year: under-declaration proportionally reduces the indemnity (article L. 113-9 of the French Insurance Code).

Frequently asked questions

Is professional indemnity insurance mandatory for a consultant or an IT firm?

No, except for regulated professions. It becomes mandatory in practice through your clients' contracts, which almost systematically require it with limits of €1 million to €5 million.

Does my professional indemnity cover my freelancers' errors?

Towards the client, you are liable for their faults. Your policy covers them if it expressly provides for subcontracting; otherwise the insurer may refuse or limit its cover. Require a professional indemnity certificate from every freelancer.

Can you refuse an unlimited liability clause?

Yes, and the law helps you: articles 1170 and 1231-3 of the Civil Code uphold a negotiated, non-derisory cap. Offer the contract value or twelve months of fees, with a higher specific cap for data, aligned with your policy.

Are late-delivery penalties covered?

Generally not: an agreed penalty is not a proven loss but an accepted debt, and most policies exclude it. Some insurers offer a "contractual penalties" extension, capped and priced separately.

At Lesto, we build professional indemnity cover for consulting firms, IT services companies and agencies starting from their client contracts: we read your liability clauses and subcontracting arrangements before consulting nine insurers on average, so that the cap you sign is one you can actually honour. Want to know whether your current cover holds up against your biggest contract? Discover our professional indemnity offer and request a 72-hour analysis.