What is Professional Indemnity cover?
A simple mistake in your calculations could cost your client millions.
Professional Indemnity Insurance (otherwise known as PI insurance) protects you and your business from financial loss and the cost of defending yourself and your business in the event of a claim being lodged against you by someone you’ve provided advice to. This is usually involved in cases with clients, and only covers the costs of defending claims against your business.
Adroit Insurance Brokers arranges tailored Professional Indemnity (PI) Insurance. The scope of work within your industry as a working professional may lead to situations where you accidentally omit information that the client should have been aware of, or provide incorrect advice that leads to damage, injury, or financial loss. Professional Indemnity cover provides financial assistance in disputing and/or covering the costs for third parties affected by your business’ inaccurate professional advice.
What Does PI Cover?
- Damages: Compensation awarded to the claimant for their financial loss
- Legal Defence Costs: Lawyers’ fees to defend the claim (even if you are innocent).
- Breach of Duty: Negligence, misleading/deceptive conduct (under Consumer Law), and breach of confidentiality.
- Defamation: Libel or slander claims arising from your professional work.
Claims Made Policy: PI is a “Claims Made” policy. You must be insured at the time the claim is made, not just when the work was done. This is why “Run-Off Cover” is vital if you retire or close your business.
Run-off cover protects you for up to 7 years after you stop practicing, covering claims about work performed while you were still operating. For medical practitioners, the Run-Off Cover Scheme (ROCS) reimburses 100% of claim costs for doctors who retire, become disabled, or cease private practice in Australia.
Professional Indemnity Insurance does NOT cover intentional misconduct or fraud, personal injury or property damage (covered under Public Liability instead), known claims you were aware of before policy inception, trading debts or contractual penalties or comprehensive cyber liability (which requires dedicated Cyber Insurance).
Always review your policy’s Product Disclosure Statement (PDS) carefully—Adroit explains exclusions in plain English.
Professions We Cover
- Medical: Doctors, Dentists, Allied Health (Medical Malpractice).
- Construction: Architects, Engineers, Surveyors.
- Financial: Accountants, Bookkeepers, Tax Agents.
- IT: Software Developers, Consultants.
Real Estate: Agents and Property Managers.
Many professions legally require Professional Indemnity Insurance to practice or maintain licensing. Accountants (CPAs) must hold minimum PI cover per CPA Australia requirements.
Tax agents need PI insurance for Tax Practitioners Board registration. Architects require it under state-based registration acts.
Medical practitioners must meet AHPRA registration standards for PI arrangements.
Financial advisers need adequate PI cover under ASIC licensing conditions. Adroit ensures your policy meets your professional body’s specific requirements.
Frequently Asked Questions
Anyone who gives professional advice is at risk of being held responsible for the results of that advice. This includes a range of professions including engineers, architects, marketing professionals, accountants, lawyers, and more. Some industries make it mandatory to have Professional Indemnity Insurance.
Situations that would put you and your business at risk include
- Breached contracts (by your business)
- Breached copyright or confidentiality (by your business)
- Important documents and information about your client had been lost or mismanaged
- Inaccurate or incorrect professional advice was provided
- The result of your inaccurate professional advice caused injury to your client/third party
Even if you’re great at what you do and offer the best advice possible, you just can’t control everything. If someone brings litigation against you, with this cover you’ll be protected from financial loss and the cost of defending yourself.
When a client or other third party person approaches your business seeking compensation for professional advice that they believe was inaccurate, it may be easier to quickly compensate them and resolve the issue as soon as possible.
However, this would mean your business is admitting to fault in situations where that may be untrue. This is why you need professional indemnity insurance for your business – to ensure you have enough financial resources to take legal action and protect your business’ reputation.
Covering the costs of a legal case against your business could well and truly reach hundreds of thousands of dollars. Without Professional Indemnity Insurance, you would need to cover these costs out of pocket, which is something that many businesses aren’t able to do. Get a quote for professional indemnity insurance at Adroit to determine how you can properly protect your business from the unexpected.
There’s no sure-fire way to eliminate the risk of litigation, but by making sure you have the right coverage, you can minimise the fallout. We’ll work one-on-one with you to make sure you have the coverage you need.
Adroit are experienced risk advisers who gather the most suitable professional indemnity insurance for your business depending on your specific needs. We’re unbiased, informative, and provide the best support by clearly answering all of your questions and concerns about business insurance in easy and understandable terms.
When choosing your professional indemnity insurance plans, going for the cheapest option may not be the best choice in protecting your business. What you need is a professional indemnity insurance cover that provides the right level of assistance for when the unexpected strikes, so you and your employees can overcome even the most challenging problems.
As with many other business insurance covers, your professional indemnity insurance cost will depend on the type of industry your business is in and the scope of professional advice you provide for your clients.
At Adroit, we sit down with you one-on-one to gain an in-depth understanding of your business and how it operates. After attaining a clear picture of your business’ services, we assess your options and provide accurate professional indemnity insurance quotes and options for you to choose from.
Resources
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