In Kenya’s dynamic professional landscape, Professional Indemnity (PI) Insurance has become an essential safeguard for consultants, medics, lawyers, engineers, and other professionals. As the country’s economy grows and regulatory frameworks tighten, having the right PI insurance is no longer optional—it is a mandatory requirement for licensing and tender participation in many sectors. In 2025, this trend is stronger than ever, with government agencies, regulators, and professional bodies enforcing stricter compliance to protect clients, consumers, and the public from financial losses caused by professional negligence.

PI insurance protects professionals against claims arising from errors, omissions, or negligence in their professional duties. Without it, individuals and firms risk devastating financial penalties, legal battles, and reputational damage. Moreover, tendering for government and large private contracts in Kenya increasingly requires proof of valid PI insurance, often with minimum coverage limits that reflect the size and risk profile of the project.

This comprehensive guide explores the latest 2025 requirements for professional indemnity insurance in Kenya, focusing on licensing and tendering. We will cover the regulatory framework, sector-specific coverage mandates, application processes, consequences of non-compliance, and how professionals can navigate the complexities with expert help.

Regulatory Framework: Key Governing Bodies and Mandates

Kenya’s professional indemnity insurance requirements are shaped by a combination of statutory regulations, professional body mandates, and government procurement policies. Understanding the roles of these institutions is crucial for compliance.

Insurance Regulatory Authority (IRA)

The Insurance Regulatory Authority (IRA) is Kenya’s main insurance sector regulator. It sets minimum standards for PI insurance policies, especially for insurance brokers and intermediaries. According to IRA’s 2024 circular for 2025 licensing:

• Minimum PI coverage limit: KES 10 million per occurrence
• Policy validity: Must run from January 1 to December 31 of the licensing year
• Additional requirements for brokers:
  • Minimum paid-up share capital of KES 1 million
  • Bank guarantee of KES 3 million or government bond in favor of IRA
  • At least 60% Kenyan ownership
• Documentation: CR-12 form detailing shareholding, principal officer’s qualifications and experience, and other statutory forms must be submitted

This framework ensures that insurance professionals maintain sufficient financial backing and risk protection to serve clients responsibly.

Professional Bodies

Different professions have their own regulatory bodies that mandate PI insurance as a condition for practice:

• Law Society of Kenya (LSK): Under the Advocates (Professional Indemnity) Regulations (Legal Notice 82 of 2004, revised 2022), all practising lawyers must hold PI insurance. This protects clients against losses from negligence, breach of trust, or errors. Failure to maintain valid PI cover can lead to suspension or refusal of practising certificates.
• Engineers Board of Kenya (EBK) and Board of Registration of Architects and Quantity Surveyors (BORAQS): Engineers, architects, and quantity surveyors must have PI insurance covering design errors, project delays, and other professional liabilities to be licensed and eligible for tenders.
• Medical Practitioners Board: Doctors, dentists, and other medical professionals are increasingly required to hold malpractice or PI insurance to practice legally and participate in public tenders.

Tender-Specific PI Requirements: 2025 Updates

Universal Tender Compliance Rules

For professionals and firms bidding for government or large private contracts, tender documents now routinely require proof of valid PI insurance. The minimum requirements typically include:

• Valid IRA registration certificates or equivalent professional licenses
• Tax compliance certificates and PIN certificates
• Proof of minimum paid-up capital, which varies by sector and tender size
• Tender security (usually 2% of bid value) via bank guarantee
• Audited financial statements and history of premium payments on PI policies

Failure to provide these documents automatically disqualifies bidders.

Sector-Specific Minimum PI Coverage

Different sectors have varying minimum PI insurance limits based on the complexity and risk of the services offered. Below is a summary table of typical 2025 minimum PI cover requirements for tenders:

These thresholds are rising as government agencies and private sector clients seek greater assurance against professional risks.

Application Process: Step-by-Step Guide

For Licensing

Professionals seeking licenses or renewals must:

1. Submit required documentation to IRA or relevant body:
   • CR-12 form showing shareholding structure
   • Curriculum Vitae and testimonials of principal officers
   • Proof of academic qualifications (degree/diploma in relevant field)
   • Evidence of at least five years’ professional experience
2. Obtain PI insurance from an IRA-approved underwriter:
   • Policy must meet minimum limits and be valid for the licensing year
3. Submit completed application forms, including fit and proper declarations

For Tenders

1. Prepare pre-bid documentation:
   • Valid PI insurance certificate
   • Proof of past PI coverage and claims history
   • Financial statements and tender security
2. Submit tender documents with PI insurance proof:
   • Tender evaluation committees score bids partly based on PI coverage levels
3. Await technical evaluation:
   • Higher PI limits often translate to better scores and increased chances of winning contracts
4. Maintain PI insurance throughout contract duration:
   • Some tenders require continuous coverage until project completion

Consequences of Non-Compliance

Failure to comply with PI insurance requirements can have severe consequences:

• Tender Disqualification: Bids missing valid PI insurance are automatically rejected, wasting time and resources.
• Legal Penalties: Professional bodies such as LSK and EBK can suspend licenses or impose fines for non-compliance.
• Financial Exposure: Without PI insurance, professionals face out-of-pocket costs for damages, legal fees, and settlements.
• Reputational Damage: Clients lose trust in uninsured professionals, harming future business prospects.

2025 Trends: What Professionals Must Know

Rising Minimum Coverage Thresholds

Government agencies like the Kenya Wildlife Service (KWS) now require PI coverage of KES 100 million or more for major tenders. This reflects growing risk awareness and the need for stronger financial safeguards.

Digital Verification and Compliance

IRA has introduced online portals for real-time validation of PI policies, simplifying tender verification and reducing fraud.

Sector-Specific Expansions

• Healthcare: Telemedicine practitioners and clinics are increasingly required to hold PI insurance covering cyber liability and malpractice.
• Technology Consultants: Cyber liability add-ons are becoming common to cover data breaches and intellectual property risks.

How Step by Step Insurance Simplifies Compliance

Navigating PI insurance requirements can be complex. Step by Step Insurance helps professionals and firms by offering:

Expert Guidance

• Tailored PI insurance solutions aligned with your profession’s regulatory and tender requirements.
• Advice on optimal coverage limits and policy terms.

Streamlined Procurement

• Access to top underwriters like APA Insurance and Britam.
• Assistance with documentation, policy issuance, and IRA submissions.

Claims Advocacy

• Support in managing claims efficiently to protect your reputation and finances.

Conclusion: Key Takeaways for 2025

Professional indemnity insurance is now a baseline requirement for licensing and tender participation across Kenya’s professional sectors. With rising coverage thresholds and stricter regulatory oversight, staying compliant is critical to avoid penalties, tender disqualification, and financial risk.

Professionals should regularly review their PI insurance policies, ensure they meet sector-specific requirements, and work with experienced brokers like Step by Step Insurance to navigate the complexities.

Secure your professional future today—get expert PI insurance advice and compliant coverage tailored to your needs!