Commercial Insurance
Safeguarding professionals against claims of negligence
If your work is advice — whether you're an accountant, consultant, designer or engineer — a single mistake can lead to a claim. Professional indemnity is designed to cover the financial cost of alleged negligence or breach of duty, subject to the terms of your policy.
What is professional indemnity insurance?
Professional indemnity insurance (PI) is designed to cover claims of alleged negligence or breach of duty while providing professional advice or services — including errors, omissions or acts that may have occurred. It's often held alongside public liability insurance.
An example — public liability
Your delivery van rolls back and damages a bakery's window and products because of a faulty brake. The bakery owner can claim against your company — and public liability insurance can respond to the damage.
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An example — professional indemnity
You make a mistake preparing a client's tax deductions and they're fined by the ATO. They can take legal action against you — and professional indemnity can respond to the loss caused by your mistake.
What does professional indemnity cover?
Details differ between policies, but most PI policies cover the costs that flow from a claim.
Exclusions vary by insurer — your policy schedule will specify them.
- Expenses from disciplinary proceedings
- Legal costs awarded against you
- Legal costs of defending or responding to a claim
- Compensation for a claim, including court-awarded damages
- Costs of investigating the case
From our clients
“Our dealings with KeyInsure have always been very friendly and helpful, also very quick response and professional advice. Pretty sure they save us money on our insurances also. Thank you.”
KeylendWho needs this cover
If clients rely on your advice, designs, reports or specialist services, a mistake or an alleged mistake can become a claim against you. Many professions are required to hold this cover to practise or to win contracts.
- Accountants, bookkeepers and tax agents
- Architects, engineers, surveyors and designers
- Management, IT and marketing consultants
- Mortgage and finance brokers
- Allied health and other regulated practitioners
- Real estate agents and property managers
What affects your premium
Professional indemnity is priced on what you do and how much of it you do.
Your profession and services
Advice with larger financial consequences attracts higher premiums than lower-risk services.
Fee income
Premiums are usually based on annual fees or turnover, so growth changes the price.
Limit of cover
A higher limit costs more. Contracts and site requirements often set the minimum you need.
Excess
Choosing a higher excess usually lowers the premium; a lower excess raises it.
Claims history
Past claims — yours and, in some cases, the industry’s — affect what insurers offer.
Retroactive date
How far back the policy covers past work. A longer retroactive period generally costs more.
Common questions
Why should you get a PI policy?
Claims can arise from any mistake — real or alleged. PI can respond to claims whether the loss is actual or alleged, subject to policy terms. Honest mistakes happen, and the right cover is about sizing your protection to your practice and turnover, so you're not paying for cover you'll never use.
What does "claims made" mean?
Most PI policies respond to claims made against you during the policy period, not when the work was done. That is why keeping the policy continuous matters, and why run-off cover is worth discussing when you retire or close the business.
Do I need PI if my client has signed a contract limiting my liability?
A contract can reduce exposure but rarely removes it, and it does not stop a third party from bringing a claim. Many contracts also require you to hold PI as a condition.
Does PI cover legal costs even if the claim is unfounded?
Typically yes. Defence costs for an alleged breach are usually covered within the policy limit, whether or not the claim succeeds. Check how your policy treats defence costs — inside or in addition to the limit.
What is a retroactive date?
It is the date from which past work is covered. Work done before the retroactive date is excluded, so when you change insurers we look to carry the existing date across.
Is PI the same as public liability?
No. PI covers financial loss arising from your professional services. Public liability covers injury to people and damage to property. Most professionals hold both.
Related cover
Ready when you are
General advice only. Consider the relevant PDS & TMD before acquiring any product.