Professional indemnity insurance provides cover for claims that your advice or services caused a client a loss or as a result of an official enquiry or investigation. It typically includes legal defence costs, settlements, and compensation related to negligence, errors, or omissions.

Professional indemnity insurance is mandatory for some registered professions and industry memberships in Australia. Even if it’s not required for your role, many clients expect proof of cover before working with you.

You may need professional indemnity insurance if you provide advice, consulting, or professional services. Common professions include consultants, real estate agents, healthcare providers, and accountants.

Professional indemnity insurance limits can vary depending on your business size, risk exposure, and the level of cover you select and market availability. The limit represents the maximum amount your insurer will pay for a claim.

The level of cover depends on your profession, risk exposure, and any contractual or regulatory requirements. Many businesses choose limits based on the size of potential claims and client expectations. Many 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.

Some policies include retroactive cover, which can protect you for past work if a claim is made later. However, coverage depends on your policy terms, conditions & exclusions, typically the retroactive date would typically be noted on your policy schedule¹.

Retroactive cover protects your business against claims linked to work you completed before your current policy started.

Your policy will only cover past work that falls after your retroactive date, which determines how far back your insurance applies.

If an eligible claim is made, your insurer can help manage the process, including legal defence, investigation, and any covered compensation payments.

Professional indemnity insurance is intended to protect your business if a client claims your advice or services caused them a loss, including legal costs and compensation.

Public liability & products liability insurance is intended to protect your business if a third party is injured or their property is damaged due to your business activities or products¹.

Professional indemnity insurance covers professionals who provide advice or services, protecting against claims of negligence or errors.

Malpractice insurance is a specialised type of professional indemnity insurance designed specifically for healthcare professionals, such as doctors, hospitals and medical practices.

Yes. Professional indemnity insurance and errors and omissions (E&O) insurance are typically the same type of cover.

The difference is mainly in the name - “E&O” is commonly used in the United States, while “professional indemnity insurance” is used in Australia and other regions. Both protect against claims of negligence, errors, or omissions in professional services.

Run-off insurance protects you against claims made after your business has closed or you have retired, or left the profession altogether, for professional services you provided in the past. Run-off cover must be arranged prior to your Professional Indemnity policy lapsing.

Professional indemnity insurance is issued on a claims-made basis, meaning it only covers claims that are made and reported during the period your policy is active.

Because of this, it’s important to notify your insurer as soon as you become aware of any issue that could lead to a claim—even before formal legal action begins, or an actual claim, your notification should be made as soon as practice but prior to your policy PI policy renewing or lapsing.

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.

In many cases, professional indemnity insurance premiums may be tax deductible as a business expense. Businesses should seek advice from their accountant or tax adviser regarding their specific circumstances.