The one sector where insurance is not a management decision but, to a large extent, a condition of practice: the law requires professional companies and several specific groups to be insured.
A professional firm does not sell goods, it sells judgement. Its main exposure is not that something breaks but that a recommendation, a calculation, an opinion or an audit turns out to be wrong and costs money to whoever relied on it. That loss is purely financial and comes with no physical damage attached, which is exactly the category general liability policies exclude by definition.
The second particularity is that here insurance is largely compulsory. Spain's Professional Companies Act requires cover for the liability arising from the corporate purpose; the Audit Act imposes a financial guarantee on auditors and audit firms; and many professions carry their own requirements under sector or professional-body rules. The programme is therefore designed against a list of obligations before it is designed against a risk map.
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In professional services insurance does not start out as a risk-management decision: it starts out as a requirement. Several statutes make cover compulsory, and the design of the programme begins from that list rather than from an exposure map.
Act 2/2007, on professional companies, requires in article 11(3) that the company arrange insurance covering the liability it may incur in carrying out its corporate purpose. Article 11(2) adds the rule that decides who pays: the company and the professionals who acted, whether partners or not, are jointly and severally liable for debts arising from professional acts.
Act 22/2015, on the Audit of Accounts, imposes in article 27 a financial guarantee on auditors and audit firms. It may be constituted through a deposit, government debt, a bank guarantee or civil liability or surety insurance, and its amount must be proportionate to turnover. It is a standalone obligation: it exists whether or not a claim ever occurs.
And Act 10/2010, on the prevention of money laundering, lists in article 2 auditors, external accountants and tax advisers among the obliged entities, alongside notaries and registrars, with their own due diligence, record-keeping and reporting duties.
Policies in this line almost always operate on a claims-made basis. What triggers cover is not when the error was committed but when it is claimed, and years can pass between the two.
That is why the moment of greatest risk is not a claim: it is a change of insurer. If the new policy starts with a retroactive date more recent than the real age of the engagements delivered, everything before it is left without cover precisely while it can still be claimed against. Article 73 of the Insurance Contract Act allows that limitation with a floor of one year, and classifies it as a limitative clause: it must be specially highlighted and specifically accepted in writing. The full treatment is in the professional indemnity page.
The practical consequence of joint and several liability is that the claimant chooses which assets to pursue. Whether the policy covers partners and associates by name, and not just the corporate entity, stops being a detail of the wording and becomes the difference between the insurer answering and an individual answering.
As a broker registered with the Spanish Directorate-General for Insurance and Pension Funds under reference J0140, New Brokers works on the client's mandate, not on behalf of any insurer.
In this sector the work concentrates on three points that do not show up when comparing premiums: defining the insured activity precisely —it changes faster than the wording does—, matching the retroactive date to the previous policy, and checking that cover reaches individuals as well as the company. All three are settled before signing; none of them is fixed afterwards.
The financial loss a technical failure causes the client. It is the central exposure of the sector and the one general liability leaves out.
A claimant can pursue both the firm and the person who signed the work. Whether the policy covers both stops being a detail.
Years can pass between the error and the claim, and under a claims-made policy the one that responds —if any does— is the one in force when the claim arrives, not the one in force then.
Firms concentrate sensitive information from many businesses at once, which makes them a target and multiplies the impact of a breach.
Auditors, external accountants, tax advisers, notaries and registrars are among the obliged entities, with their own due diligence and reporting duties.
Professional-body proceedings precede and often shape the later civil claim, and carry their own defence costs.
Architects, engineers and site managers also answer under the specific construction regime, with ten, three and one-year periods.
In small firms a partner's departure takes clients with it and exposes the firm to claims on work that partner signed and that is still live.
The obligations that, in this sector, trigger the purchase of a specific cover.
| Rule | What it requires |
|---|---|
| Act 2/2007, on professional companies — View the legislation | Article 11(3) requires professional companies to arrange insurance covering the liability they may incur in carrying out the activity that forms their corporate purpose. Article 11(2) makes the company and the professionals who acted —whether partners or not— jointly and severally liable for debts arising from professional acts. |
| Act 22/2015, on the Audit of Accounts — View the legislation | Article 27 requires statutory auditors and audit firms to provide a financial guarantee to answer for the damage they may cause. It may be constituted through a deposit, government debt, a bank guarantee or a civil liability or surety insurance policy, and its amount is proportionate to turnover. |
| Act 10/2010, on the prevention of money laundering — View the legislation | Article 2 lists statutory auditors, external accountants and tax advisers among the obliged entities, along with notaries and registrars, with due diligence, record-keeping and reporting duties that go beyond the ordinary professional engagement. |
| Act 50/1980, Insurance Contract Act, art. 73 — View the legislation | It permits clauses limiting cover in time, with a floor of one year forward or backward, and expressly classifies them as limitative under article 3: they must be specially highlighted and specifically accepted in writing. |
| Act 38/1999, on Building Regulation, art. 17 — View the legislation | It makes the agents involved in construction —designers and site managers included— liable for ten years for structural damage, three for habitability and one for finishes, counted from acceptance of the works. |
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Go to the client areaThe client sues both the firm and the individual professional who signed the work, looking for whichever assets will answer first.
What it means
Article 11(2) of Act 2/2007 makes them jointly and severally liable for debts arising from professional acts. If the policy only covers the corporate name and not partners and associates by name, the individual is exposed to the extent of their own assets.
The firm switches carrier and the new policy starts with a retroactive date more recent than the age of engagements already delivered.
What it means
Everything delivered before that date is left without cover precisely while it can still be claimed against. It is the most expensive gap in the sector, and it is closed before cancelling the previous policy, not afterwards.
An audit firm has not constituted the financial guarantee the law requires, or holds one for an amount that no longer matches its turnover.
What it means
The guarantee is a standalone obligation, prior to any claim, and its amount must be proportionate to turnover. It can be arranged through civil liability or surety insurance, which allows it to be resolved within the same programme.
The central line for the sector: it answers for the financial loss a technical error causes the client, and it is the one the Professional Companies Act requires.
The financial guarantee imposed by the Audit Act expressly admits surety insurance, and public tenders require a definitive guarantee.
A firm concentrates sensitive information from many businesses at once, which multiplies the regulatory and reputational impact of a breach.
A management decision about the firm itself is D&O territory, distinct from a technical error towards a client.
It answers for bodily injury and property damage at the firm's premises, which professional indemnity does not cover.
In a sector where the asset is talent, group health and life weigh more as a retention tool than as cover.
The core is professional indemnity, which for professional companies is not optional: article 11(3) of Act 2/2007 requires insurance covering the liability arising from the corporate purpose. On top of that come cyber risk for the client information held, D&O where there is a governing body, general liability for the premises, and surety where the firm bids for public work or a sector financial guarantee applies. The scope of each is governed by the specific terms of each policy.
Both. Article 11(2) of Act 2/2007 provides that the company and the professionals who acted, whether partners or not, are jointly and severally liable for debts arising from professional acts proper. The claimant can pursue whichever assets it prefers, which is why it matters that the policy names individuals as insured alongside the corporate name.
Article 27 requires statutory auditors and audit firms to provide a financial guarantee to answer for the damage they may cause in carrying out their activity. It may be constituted through a cash deposit, government debt securities, a bank guarantee or a civil liability or surety insurance policy, and its amount must be proportionate to turnover.
Yes. Article 2 of Act 10/2010 lists statutory auditors, external accountants and tax advisers among the obliged entities, together with notaries and registrars. That brings its own due diligence, record-keeping and reporting duties, which go beyond the ordinary professional engagement and carry their own penalty regime.
Because in this sector the policy almost always operates on a claims-made basis, not on occurrence: what triggers cover is when the claim is made, not when the error was committed, and years can pass between the two. Article 73 of the Insurance Contract Act allows that limitation with a floor of one year forward or backward, and classifies such clauses as limitative, so they must be highlighted and accepted in writing.
A description of the services and the team's qualifications, the legal form and whether it is a registered professional company, turnover by type of work and by client, any contracts or tender documents imposing minimum limits, the claims and disciplinary history, and current policies with their retroactive dates.
Professional indemnity (E&O) insurance covers the financial loss that an error or omission causes to the clients of an engineering, consulting or IT firm. Here is its scope and why it is claims-made.
Read→This information is for guidance only and is not binding. Covers, limits and exclusions are governed in all cases by the specific terms of each policy. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.