Professional Indemnity Insurance in Spain

Spanish Insurance Law: Professional Indemnity — Key Facts, Limits & Exclusions

The legal framework, specific waiting periods, exclusions and citations every prospective policyholder should know. Sources are linked inline to the BOE (Boletín Oficial del Estado) and Spanish regulators.

Legal framework — when PI is mandatory

Professional indemnity insurance (Responsabilidad Civil Profesional) is mandatory in Spain for several regulated professions. Ley 34/2006 (Acceso a la profesión de abogado) requires lawyers to maintain professional liability cover. Architects under the LOE Article 19, engineers, healthcare professionals (under regional medical colegios), notaries and registrars must all carry PI. Ley 2/2007 de Sociedades Profesionales extends mandatory cover to multi-disciplinary professional partnerships.

Voluntary cover for non-regulated professionals

Even when not legally required, PI cover is strongly recommended for: consultants, project managers, IT contractors, marketing and design freelancers, and translators. Most British and Irish company contracts now require PI as a standard supplier-vetting term — €500,000–€2,000,000 indemnity is the typical contractual ask. Without PI, a single professional negligence claim can destroy a freelance business: legal-defence costs in Spain run €5,000–€20,000 even before any settlement.

What's covered

A PI policy covers claims for negligent acts, errors and omissions arising from professional services. It covers: defence costs (typically outside the limit on Spanish policies — Hiscox and most major underwriters); civil claims and settlements; regulatory investigations and disciplinary proceedings; and reputational protection costs. Claims-made basis: only claims notified during the policy period are covered, regardless of when the work was done — this makes continuous cover and retroactive date selection critical.

Run-off cover (extended reporting)

When a professional retires or stops trading, claims can still arise years later — most PI cover is claims-made not occurrence. Run-off cover extends the reporting window after the policy ends, typically for 6 to 10 years, matching the Spanish civil liability statute of limitations under Código Civil Article 1968.2 which gives 1 year for tort claims and longer for contractual claims. Always negotiate run-off when retiring or selling a practice.

Standard exclusions

PI typically excludes: fraud and dishonest acts; known circumstances at policy inception (the famous"circumstances clause"); contractual liability beyond what the law would impose; liabilities assumed under penalty clauses; punitive damages; fines and criminal penalties (fines for wrongful acts cannot be insured under public policy); and work performed outside the declared scope (e.g., a chartered accountant giving legal advice).