Professional Indemnity Insurance Australia​

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PI insurance for professionals, consultants and businesses

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Professional indemnity insurance can help protect your business against covered claims arising from errors, omissions or negligence in the professional services or advice you provide. Depending on the policy, protection may include eligible legal defence costs and compensation payable to a client.

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Clarke Lyons Insurance helps Australian professionals assess their exposures, compare available professional indemnity insurance options and arrange cover that reflects their work, contracts and industry requirements.

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Whether you operate as a sole trader, run a consultancy or manage an established professional practice, the details matter: what you do, who relies on your work, when a claim is made and which exclusions apply.

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Based in Sydney and supporting businesses across Australia, we help you understand those details before you choose a policy.

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Request a professional indemnity insurance quote or call 1300 18 13 12.

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What is professional indemnity insurance?

Professional indemnity insurance, also called PI insurance, addresses specified civil liability arising from your professional services. It may respond when a client or another party alleges that your advice, design, work or failure to act caused them a loss.

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An allegation can require a response even when you believe your work was correct. Eligible defence costs may be covered, subject to the policy’s terms and insurer consent.

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The insured professional services are central to the cover. A policy described for one type of consultancy should not be assumed to cover every service your business provides.

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For example, preparing a design, supervising its installation and certifying compliance can involve different responsibilities. Your insurance proposal should describe the complete scope of your work.

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Australian Government guidance identifies professional indemnity insurance as protection that helps cover the costs of legal action involving professional advice or services. 

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Who needs professional indemnity insurance?

Consider PI insurance if clients rely on your advice, recommendations, designs, calculations, reports or specialist services.

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It may be relevant when you:

• Provide professional advice or consultancy.

• Design, specify, assess, certify or supervise work.

• Prepare financial information, valuations or compliance documentation.

• Manage projects, property or client transactions.

• Deliver technology services or advise on business systems.

• Need cover under a registration, membership or client contract.

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Professional indemnity requirements vary. Some arise from regulation; others come from professional bodies or commercial agreements. There is no single rule requiring every Australian professional to hold the same policy or limit.

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Registered tax and BAS agents, for example, must maintain insurance arrangements that meet the Tax Practitioners Board’s requirements. The appropriate cover must also reflect the risks of the individual practice. 

Even where insurance is not compulsory, consider the potential cost of defending a claim and compensating a client.

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Professional indemnity insurance by profession

Your professional responsibilities should shape your PI insurance. Explore the relevant specialist page, then discuss any additional activities with Clarke Lyons.

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Engineers, architects and design professionals

Engineering and design businesses may face claims involving calculations, specifications, design decisions, documentation or project responsibilities.

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Explore professional indemnity insurance for engineers and consulting engineers, including the work performed by structural, civil, mechanical and electrical engineering practices.

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We also provide information for architects, building designers, draftspersons and interior designers.

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Accountants, bookkeepers and financial professionals

Financial reporting, tax services, record-keeping, lending and financial advice create different exposures. Describe the services provided and confirm the requirements applying to your business.

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Explore PI insurance for accountants, bookkeepers, financial planners and mortgage brokers.

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Consultants and technology professionals

Consultancies can face allegations involving recommendations, implementation work, business analysis or project outcomes. Technology businesses should also consider how professional liability interacts with cyber exposures.

Read about PI insurance for consultants, management consultants and IT consultants.

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Property, construction and planning professionals

Valuations, inspections, certification, planning advice and project administration require careful descriptions of professional activities.

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Explore cover for surveyors and quantity surveyors, building certifiers and building surveyors, town planners and project managers.

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For property businesses, see real estate agents, property managers and strata managers.

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Migration agents and conveyancers

Advice, documentation, deadlines and transaction responsibilities can create professional liability exposures.

Explore PI insurance for migration agents and conveyancers.

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If your profession is not listed, contact us with a description of your services. Available cover depends on the risk and insurer acceptance.

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What does professional indemnity insurance cover?

A PI policy may cover specified claims involving:

• Negligent professional advice or services.

• Errors or omissions in reports, designs or documentation.

• Breaches of professional duty.

• Certain breaches of confidentiality.

• Unintentional defamation or intellectual property infringement, where included.

• Eligible costs of defending an insured claim.

• Compensation or settlements covered by the policy.

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These features vary between policies. Extensions may have separate conditions, exclusions or sublimits.

Check whether defence costs sit within the policy limit or are payable in addition. Also review the excess, aggregate limit and treatment of related claims.

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A policy with a higher headline limit can still have narrower protection for an activity that matters to your business.

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Examples of professional indemnity exposures

The following scenarios illustrate potential allegations. They are not Clarke Lyons claims histories or promises of cover.

An engineering calculation is challenged. A client alleges that a design error caused rectification costs and project delays. Relevant questions include the insured services, design responsibilities, applicable exclusions and notification timing.

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A consultant’s recommendation is disputed. A client claims that advice relied on incomplete information and caused financial loss. The engagement scope and the policy’s professional services description would need review.

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An accountant allegedly misses a deadline. A client seeks compensation for a loss associated with an alleged service error. The circumstances, regulatory requirements and treatment of penalties would need assessment.

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An IT implementation fails to meet expectations. A customer alleges that configuration errors disrupted operations. Professional liability, contractual obligations and cyber policy interactions may all be relevant.

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In each case, liability and insurance coverage require assessment against the facts and policy wording.

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What does PI insurance not cover?

Professional indemnity insurance does not cover every dispute or business loss.

Areas requiring careful review include:

• Claims or circumstances already known before the policy began.

• Work outside the declared professional services.

• Activities before the applicable retroactive date.

• Liability assumed under contract beyond what the policy insures.

• Deliberate wrongdoing and the perpetrator’s dishonest conduct.

• Fines and penalties where excluded or legally uninsurable.

• Guarantees of performance or specific commercial outcomes.

• Particular project, product or industry exclusions.

• Cyber incidents, bodily injury or property damage where excluded or only partly covered.

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Refunds, defective work and the cost of correcting your own services should not be assumed to be insured.

Tell your broker about all activities, including secondary services, overseas clients and subcontracted work. A broad trading name does not establish the scope of cover.

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How does claims-made professional indemnity insurance work?

Professional indemnity insurance is commonly written on a claims-made basis. The timing of the claim and notification can be central to whether the policy responds.

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A claim relating to work completed several years ago may need to be considered under the policy in force when the claim is made, subject to notification requirements and other terms. 

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Check the wording and seek prompt guidance when you receive a complaint, demand or information suggesting a possible claim. Do not assume that the policy held when the work was performed will automatically respond.

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Learn more about claims-made professional indemnity insurance.

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Retroactive dates and previous work

A retroactive date can restrict which earlier services are eligible for cover.

When renewing or changing insurers, review the treatment of past work, any change to the retroactive date and exclusions for known claims or circumstances. Retroactive cover does not mean every historical matter is insured.

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Run-off cover when you retire, sell or close

Closing a business does not necessarily end exposure to claims arising from earlier work.

Run-off arrangements may address covered claims made after you stop providing services. Discuss the period, terms and applicable professional requirements before cancelling your existing policy.

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Read about run-off cover when closing, selling or retiring.

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How much does professional indemnity insurance cost?

There is no single PI insurance premium appropriate for every profession.

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Insurers may consider:

• Your profession and complete scope of services.

• Annual revenue or professional fees.

• Client types, project sizes and work locations.

• Overseas work and contractual responsibilities.

• Claims history and known circumstances.

• Required policy limits and excess.

• Previous insurance and retroactive cover.

• Risk management procedures and subcontractor arrangements.

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Two businesses with similar turnover may receive different quotes because their services and exposures differ.

Comparing professional indemnity insurance should involve the wording as well as the premium. A cheaper quote may contain a restriction, excess or sublimit that changes its usefulness.

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Read our guide to professional indemnity insurance costs in Australia.

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How much PI cover does your business need?

Start with your regulatory, professional-body and contractual requirements, then assess your potential exposure.

Consider the consequences of one serious error, the possibility of several clients being affected and the cost of defending a complex claim.

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Review:

• The limit for each claim and the total available during the policy period.

• Whether defence costs reduce that limit.

• Relevant sublimits and exclusions.

• How multiple or related claims are treated.

• Whether any reinstatement is available.

• Your ability to fund the excess.

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Meeting a client’s minimum limit does not establish that every obligation in the contract is insured. Have significant indemnities and liability clauses reviewed before accepting them.

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Professional indemnity vs public liability insurance

Professional indemnity and public liability address different exposures.

Professional indemnity concerns specified claims arising from professional advice or services.

Public liability concerns specified liability for injury to other people or damage to their property connected with business activities.

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For example, a disputed design recommendation raises different questions from accidentally damaging a client’s property during a visit. Businesses that provide advice and work at client sites may need both covers.

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Explore public and product liability insurance.

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Professional indemnity and cyber insurance

PI insurance should not be assumed to cover all cyber-related losses.

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A cyber incident may involve your own recovery costs, operational interruption and liabilities to others. A professional services claim may also arise, depending on what happened.

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Check how your PI, technology liability and cyber policies interact, including exclusions and overlapping terms.

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Explore cyber insurance or read our guide to cyber insurance versus professional indemnity insurance.

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Compare professional indemnity insurance with Clarke Lyons

We help you understand how available PI insurance options relate to your business.

The process begins with your services and responsibilities. We then help review relevant limits, excesses, exclusions and policy features, explaining important differences between the options presented.

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We can also discuss cover at renewal, changes to your services and the steps to take when a potential claim arises.

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Our Sydney base supports professional businesses across Australia. Explore our Sydney, Melbourne and Brisbane broker pages.

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Available options remain subject to insurer acceptance and policy terms.

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What information do you need for a PI insurance quote?

For an initial discussion, prepare:

• Your profession, legal entity and trading name.

• A description of every professional service provided.

• Annual revenue or fees and staff numbers.

• Client types, work locations and project responsibilities.

• Any required insurance limits.

• Previous claims or circumstances that could lead to a claim.

• Details of your existing policy and retroactive date, if applicable.

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Additional information may be needed for particular professions or complex risks. Contact us before sending confidential client documents.

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If a claim or potential claim is already known, disclose it at the outset. A new policy should not be assumed to cover an existing matter.

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Professional indemnity insurance FAQs

Is professional indemnity insurance compulsory in Australia?

It depends on your profession and circumstances. Requirements may arise from legislation, registration, professional membership or contracts. Confirm the rules applying to your services and assess whether the proposed policy meets them.

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Do sole traders need professional indemnity insurance?

Sole traders can face claims arising from professional advice or services, even without employees. Consider the risks of your work and any client, registration or contractual requirements.

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Can PI insurance cover work completed before the policy started?

Potentially, subject to the retroactive date, insured services and other policy terms. Prior known claims or circumstances and gaps in insurance require particular attention.

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Does professional indemnity insurance pay legal defence costs?

A policy may cover eligible defence costs associated with an insured claim. Check insurer consent requirements, the excess and whether those costs reduce the compensation limit.

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Can I arrange professional indemnity and public liability insurance together?

Depending on your profession and insurer acceptance, the covers may be available in a combined arrangement or through separate policies. Review each section because the covers address different exposures.

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How do I compare professional indemnity insurance quotes?

Compare the professional services description, limits, excess, defence costs, retroactive date, exclusions and extensions alongside the premium. Ask your broker to explain differences that affect your actual work.

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Request a professional indemnity insurance quote

Arrange PI insurance around the services your clients rely on.

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Whether you are starting a practice, renewing your policy, changing your services or reviewing contractual requirements, Clarke Lyons Insurance can help you assess available professional indemnity insurance options.

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Request your PI insurance quote.

 

Call: 1300 18 13 12

Email: gareth@clarkelyons.com.au

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This information is general and does not take account of your objectives, financial situation or needs. Cover depends on insurer acceptance, policy wording, schedules, endorsements, exclusions, limits and excesses.