Professional Indemnity Insurance
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What is Professional Indemnity Insurance?
Professional Indemnity insurance (also known as PI insurance) is designed for professionals who provide advice or services to their customers and may even be a legal requirement for some professions. It can cover claims made against your business by customers or other third parties alleging that in performing your professional services, your business has caused them loss.
PI insurance can also help by providing cover for legal costs, settlements and court orders or judgments associated with claims against your business, provided they are covered by the policy.
To learn more about Professional Indemnity Insurance, read our comprehensive guide to PI.
Let's learn more about Professional Indemnity Insurance
What is typically covered and not covered?
| Covered | Not covered |
|---|---|
| Claims investigation costs Includes cover for the costs of investigating, defending and settling claims made against your business.1 | Third-party personal injury or property damage covered under Public or Product Liability Insurance |
| Cover for contractors PI policies can provide cover for claims relating to the performance of professional services by your consultants, contractors, subcontractors or agents, which you are legally liable for.1 | Loss or damage which has not come about as a result of your advice or service |
| Retroactive and run off cover PI Insurance can include cover for claims arising from acts, errors or omissions that are alleged to have happened before your insurance start date and can include cover which survives after you retire or leave the profession for acts, errors or omissions occurring before you retired or left the profession.1 | Any assumed liability under a contract with a client (Contractual liability) |
| Public relations costs Includes cover for the cost of a public relations consultant to help reduce damage to your reputation following a claim against your business.1 | |
| Public and products cover Professional Indemnity Insurance can also include Public and Products Liability cover, which can help you to pay for costs or loss which you are required to pay where a third party suffers personal injury or property damage or loss caused by products that are sold or supplied through your business.1 |
Who needs Professional Indemnity Insurance?
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Frequently Asked Questions
What is the difference between Professional Indemnity Insurance and Public Liability Insurance?
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.
Is Professional Indemnity insurance the same as Malpractice Insurance?
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.
Is Professional Indemnity insurance the same as “Errors and Omissions”?
Yes. Professional Indemnity Insurance is also known as Errors & Omissions in some parts of the world, including the United States.
What are the limits on Professional Indemnity Insurance?
Limits in the amount of cover will depend on the level of insurance you’ve taken out and the needs and circumstances of your business. You can consult our team of specialist brokers to help understand the coverage options available for your business.
How much Professional Indemnity Insurance do I need?
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. 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.
What is retroactive cover?
Retroactive cover is protection for claims which are based on services or advice you provided before the start date of your current Professional Indemnity Insurance policy. When taking out Professional Indemnity Insurance cover, you may be asked to nominate a retroactive cover date or the insurer may impose one.
What is run-off insurance?
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.
Are Professional Indemnity insurance policies issued on a claims-made or occurrence basis?
Professional Indemnity 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 Professional Indemnity 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.
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1Subject to full terms, conditions and limits of the policy. Please review the full policy wording for more information.