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A senior manager at Business Link London has said businesses should "document absolutely everything" to minimise the potential damage of an indemnity claim.

Professionals in the business of selling their knowledge, such as finance and business advisors, are thought to be most at risk.

Denis Palmer says: 'If you’re providing a service, make it very clear in writing what the limitation of what you are providing is.'

He added this is important so the business can set client expectations at the earliest possible stage in the transaction.

It is important to do this where the product is "less tangible" and more of a service, says Palmer.

Claims could be significant, particularly in a case involving a business and an advisory service.

He concludes that if the advice was not followed and something went wrong resulting in the failure of the business, then a claim could be successfully made.

Professional indemnity insurance is defined by the Financial Services Authority as a liability insurance that covers businesses in the event that a third party claims to have suffered a loss as a result of professional negligence.