Professional Indemnity Insurance

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Professional Indemnity insurance provides cover for claims made against your business by third parties claiming that your professional services or advice caused them loss. Public Liability insurance covers the costs associated with a third party’s claim for personal injury or property damage or due to products that are sold or supplied through your business.

Professional Indemnity insurance is a mandatory requirement for some professions in Australia, including some registered professions or as part of a professional membership. The level of PI insurance required varies by profession. Even if PI insurance is not mandatory for your profession, your clients may require it. Before some clients hire you, they may want to see proof of your PI insurance. This helps assure them that your business will be strong enough financially, to deal with a worst-case scenario. 

The average cost of PI insurance in Australia varies by factors including the level and type of cover you select, your profession and whether you have had any previous claims. You can get a quote online or by speaking to an Aon broker.

Coverage under these policies can be similar, but they’re designed for different professions. Medical Malpractice Insurance is designed specifically for healthcare professionals, hospitals and surgeries.

Yes. Professional Indemnity Insurance is also known as Errors & Omissions in some parts of the world, including the United States.

Limits in amount of cover will depend on the level of insurance you’ve taken out and your business’ needs or circumstances. You can consult with your broker who can help you determine how much cover you may need for your business.

Every policy has exclusions, and you should read your policy wording and speak to your broker to fully understand the exclusions specific to your policy.  Some of the types of claims which generally aren’t covered include claims which arise from your intentional damage, fraud & dishonesty, and where you have assumed the liability under a contract.

This will depend on a number of factors such as your profession, your business needs and the clients you work with. Some professions are required by law to hold a minimum level of cover, and some clients may require you to have a minimum level of cover to work for them. Most PI Insurance policies start at a minimum cover of $1 million, but you should decide the appropriate limit for you and consult with your broker about this if you need to.

Retroactive cover is protection for claims which are based on services or advice you provided before the start date of your current PI insurance policy. When taking out PI cover, you may be asked to nominate a retroactive cover date or the insurer may impose one.

Run-off insurance provides coverage for claims made against you after your business ceases operating, or after you retire, based on advice or services you provided whilst in business.  Depending on the policy, you may be required to pay additional premium to activate run-off cover.  

PI Insurance is written on a claims-made basis. This means it will only cover claims made while the policy is in force. The claims-made basis of PI insurance means it is very important that any circumstances which may give rise to a claim, or any claim itself, be notified to the insurer as soon as possible after they occur. For example, if a client complains to you about your advice, your insurer should be notified at that time, rather than wait until a formal claim is made. If that client does decide to take legal action against you at a later date, you may not be entitled to cover if the insurer wasn’t notified previously.

Depending on your profession, and the nature of the work you carry out, there are several different policies you may need to consider. For example, if you have an office and have clients visit you, you can take out Business Insurance to cover the cost to repair your premises if your office is damaged by fire, storm or other event, as well as Public and Products Liability to cover you if someone is injured on your property or by your products. Cyber Insurance also offers important protection, which can protect your business against cyber threats and other internet-based risks.