Professional Indemnity Insurance


What is Professional Indemnity Insurance?


Posted 11 April 2013

Professional indemnity is an important form of insurance for anyone working in a professional or expert capacity.

If you provide advice to clients, or you have clients who rely on your expertise or skill, it is important that you are protected financially in the event that something goes wrong.

The good news is that professional indemnity insurance can provide you and your business with a great deal of protection at a reasonable cost.

What is it?

Professional indemnity covers you from a range of risks, such as claims for alleged negligence or breach of duty arising from an act, error or omission in the performance of your professional services.

Basically, if you do something (or fail to do something) in the course of your business and the client suffers a loss, they may choose to take legal action against you. This is where your professional indemnity insurance comes in.

What does it cover?

The policy can cover claims involving financial loss, personal injury or property damage.

Such losses suffered by a client can be covered by your insurance if they have been caused by your mistake or negligence, or your failure to exercise the required level of skill for your profession.

As well as covering your client's costs the policy will also cover your own legal defence costs, along with a range of other costs depending on your particular policy.

Who needs it?

Traditionally, professional indemnity has been seen as a form of insurance needed only by professionals such as solicitors, accountants and doctors.

Things have changed however, and today there are far more occupations and business types which are deemed to have a professional duty to their clients.

Generally speaking, anyone who holds themselves out to have a special skill and provides advice or services to others can be considered as a professional and should therefore be insured as one.

Some of the common occupations requiring insurance include the following:

  • Accountants
  • Financial Advisers
  • Financial Planners
  • Solicitors
  • Business Coaches
  • Mortgage Brokers
  • Bookkeepers
  • Debt Collectors
  • Consultants
  • Doctors
  • Dentists
  • Veterinarians
  • Nurses
  • Midwives
  • Recruiters
  • Marketers
  • Architects
  • Engineers
  • Real Estate Agents
  • Travel Agents
  • Education
  • IT Professionals
  • Risk Managers
  • Tax Agents

For most occupations and business types this form of insurance will be optional, however for certain occupations the cover is mandatory.

Common occupations where professional indemnity insurance is mandatory include financial advisers and planners, insurance brokers, accountants, legal professionals and medical practitioners.

If you're unsure about whether or not you need professional indemnity, or if you have any other questions about the cover, you should speak with your insurance broker.


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Please note that all information on this website is general in nature and does not take into account your personal circumstances. The information we have provided about professional indemnity insurance is generalised and does not reflect any one particular policy. For more information about a specific policy please contact the insurer for a copy of their PDS (Product Disclosure Statement). You should not take any action based on the information on this website without first seeking suitable advice from a qualified and licensed insurance broker.