Policy mechanics
Loss of documents cover under a Professional Indemnity policy
Why losing a client's original documents can trigger a claim even without any error in your professional advice, and how PI policies typically respond.
Key takeaways
- ✓Many PI policies include a specific extension for loss of, or damage to, client documents entrusted to you
- ✓This exists because losing an important original document can cause a client real financial loss even where your professional advice was entirely correct
- ✓Cover typically responds to the cost of restoring or reconstructing lost documents, and consequential loss where reconstruction isn't possible
- ✓This is distinct from a cyber or data breach event — loss of documents cover addresses physical or specific-file loss, not a broader network security failure
What triggers this cover
Typical scenarios include a file destroyed in a fire or flood, an original signed contract or title deed misplaced in your office, or physical documents lost in transit between offices or to a client.
What it typically pays for
Reasonable costs of reconstructing lost documents — search fees, re-drafting costs, retrieval from third-party sources such as a deeds office or court registry — and, in some cases, a client's consequential loss where reconstruction genuinely isn't possible.
Where this overlaps with, and differs from, Cyber cover
A loss of documents extension on a PI policy is generally narrower than a full Cyber Liability policy. A ransomware attack encrypting your entire document management system is a network security event, better addressed by Cyber cover, while a single lost physical file sits more naturally under a PI document-loss extension. See our PI vs Cyber Insurance comparison for the fuller picture.
FAQ
Frequently asked questions
Increasingly, yes, on modern policy wordings — but always confirm with your specific insurer, since older wordings were drafted with physical documents in mind.