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What is professional indemnity insurance?

Professional indemnity cover can help protect you and your business from legal action or claims of negligence made against you in a professional capacity.

It is designed to help remediate loss or damage caused as a result of negligent conduct, for example: breach of duty, errors or omissions, IP and copyright infringement, and document loss or damage.

Some things are typically excluded by indemnity policies such as intentional damage, existing circumstances, bankruptcy, and anything you agreed to in your contract with a client.

What does professional indemnity insurance cover?

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Safeguard your business

Help protect your business against allegations that your advice caused clients (or third parties) financial loss; and the legal costs that these claims may incur.

Up to $10m liability limit

This policy provides cover for any one claim and in the aggregate for a selected liability limit option (up to $10m). The liability limit is the maximum amount that can be received for a successful claim.

Optional extension

You have the option to help protect your business further – and have better peace of mind – by adding the public liability insurance with a limit of liability of either $10 million or $20 million.

IP infringement

This policy provides cover for intellectual property (IP) infringement, in the event you unintentionally breach trademark, design, patent or copyright in your work for clients.

Defamation

The professional indemnity policy can help protect you and your business’s reputation against allegations of defamation, slander or libel – and all the costs or legal fees incurred.

Lost or damaged documents

This policy includes coverage for documents that are damaged or lost while in your custody – and may cover the costs to replace or restore these lost or damaged documents.

Reputation repair

The professional indemnity insurance can help protect you against allegations that may seriously impact you and your business’s reputation – and may cover associated public relations expenses.

Claims investigation costs

The professional indemnity policy can help cover the legal costs and other expenses incurred in the investigation, defence and settlement of claims made against you.

Negligence

This policy helps protect you and your business against claims of professional negligence – and provides cover for the financial consequences that arise from these acts of neglect, error or omission.

Breach of duty

This policy can help protect you and your business against claims that you failed to carry out your professional duties – like lodging a client’s paperwork on time – and any expenses incurred.

Breach of privacy or confidentiality

This policy provides cover for allegations of breach of privacy or confidentiality – such as accidentally revealing a client’s personal data online – and any expenses incurred.

General exclusions

These are some examples of the general exclusions in professional indemnity insurance. Speak to your broker to find out more.

Existing circumstances

This professional indemnity policy does not cover claims or circumstances that have existed – and that you are aware of or know about – since before your policy start date.

Intentional damage

This professional indemnity insurance does not cover any costs associated with intentional property damage or personal injury you may cause to clients or third parties.

Contractual obligations

This policy does not cover costs or expenses that arise due to your compliance with contractual requirements or obligations that you and a client had previously agreed to.

Bankruptcy

Professional indemnity insurance may not cover loss, costs or claims that arise out of – or are connected with – your business’s bankruptcy, insolvency or liquidation.

Key product highlights

Minimise disruptions

Claims that your work caused clients damage or loss can mean disruptions to your business – and substantial costs in defence or compensation.

Coverage across industries

This policy covers businesses across industries – including accountants, solicitors, travel agents, health therapists and graphic designers.

Cover costs

This policy can help protect your assets, reputation and finances – and help cover legal costs, claims investigations and settlement judgements.

Tailored to your industry

We can arrange for the professional indemnity coverage that suits the needs and risk profile of your business and occupation.

Why use a broker?

Choosing business insurance means navigating through products, coverages and policy terminology – with a sales pitch as your only guide. An experienced broker will spot your unique set of risks, match you to the right choice, and advocate for you on price.

Why Marsh?

Why should you choose Marsh to arrange your insurance solutions?

Trusted by 130 associations

We are proud to be the endorsed insurance broker for more than 130 Australian industry groups and member associations, developing insurance solutions that help meet the risk and insurance needs of businesses across a variety of industries.

Local expertise

Our Australia-wide network of brokers have spent years at the coalface supporting business owners manage their unique risks in a fast-changing market. They keep ahead of the latest market insights both local and global and break down the jargon into your language

Claims support

Handling an insurance claim can quickly become overwhelming, not least when your time is stretched to the limit keeping your business going in the backdrop. We help take the load off and manage, negotiate and settle claims with insurers on your behalf.

Quick and simple process

You can easily request a professional indemnity quote and coverage via our user-friendly online platform. We’ll get back to you with options tailored to your requirements as quickly as we can, so you won’t need to spend too much time away from your business.

Multifaceted approach

Our team of specialist brokers can work with you in the way you’re most comfortable with. Whether that is online, through a phone call, or in person, all you have to do is let us know your preferred approach – and we’ll take care of the rest.

Superior capabilities

Our capabilities are unrivalled. With our ability to leverage the Marsh McLennan network across the Pacific and globally, you get to enjoy access to unparalleled insight, service, tools and capabilities across the full spectrum of risk.

Related insurance solutions

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Professional services cover

Whether you’re a sole trader or freelance professional, help protect your consultancy business with professional indemnity insurance.

Personal trainer insurance

Want fitness insurance that doesn’t weigh you down? Let Marsh arrange your cover – and get your certificate of currency in minutes.

Accountancy insurance

You can count on Marsh to arrange insurance solutions to help protect you and your firm with comprehensive cover.
   

Travel agent insurance

We can arrange insurance products and services that may suit the travel industry, including professional indemnity and income protection.

Beauticians insurance

Like the perfect primer, the right insurance can protect help your business. Let Marsh arrange your cover – while you get your beauty rest.

Public liability cover

Help protect your business against third-party accidents and costly legal fees. Let us arrange the right cover for your needs.
  

Management liability cover

Help protect your business – and your team – against management and operational risks with management liability cover.
   

Cybersecurity insurance

Cyber attacks are becoming increasingly common. Help protect your small business with cyber insurance solutions arranged by Marsh.

Frequently asked questions

You would generally need professional indemnity cover if you provide service to clients that involve giving advice or sharing your expertise. Some examples of professions who should consider professional indemnity insurance include:

  • Consultants – management consultants, IT consultants, financial advisers, accountants, designers, lawyers, brokers
  • Construction professionals – builders, architects and engineers
  • Healthcare and allied health professionals – doctors, dentists, naturopaths, acupuncturists, beauty and massage therapists.

You should consider professional indemnity (PI) cover because it provides financial protection for you and your business in the event that a claim is made against you for negligence, breach of duty, or an error or omission. It can also help build trust with clients, and may demonstrate  a level of commitment to the quality of your work.

For some professions, PI insurance is even a legal requirement, for example, solicitors, doctors and allied health professionals must have PI cover. If you are not sure whether it’s a requirement for your field  of work or business, it’s a good idea to check with your local governing industry body.

It depends on a few factors – for example, you would need to assess the risks associated with your industry and the services you provide, as well as the possible impacts you might have on your clients. Some professions may also be required by law to have a minimum level of cover for their industry, but these can vary depending on which state or territory you live in.

To match you with the best level of professional indemnity cover for your business needs, it would be wise to first seek advice from a broker who understands your industry or business requirements.

The cost of your professional indemnity insurance will depend on several factors, including your business size, revenue, and services provided.

When requesting a quote, be sure to fill in the form values as accurately as possible, so we can arrange the right premium and cover for your business.

Or you can request a call back to speak to a Marsh advisor for a clearer picture.

Professional indemnity insurance can cover your business for up to $10 million.

Generally, professional indemnity insurance doesn’t cover existing circumstances, intentional damage, contractual obligations and bankruptcy.

Professional indemnity insurance can cover you for claims made due to incorrect or misleading advice.

Public liability, on the other hand, can cover you against claims resulting from property damage, accidents or injuries that happen due to your business activities.

Yes. The terms are interchangeable, and they refer to the same insurance.

‘Claims made’ is an insurance policy that covers claims made against you during the current insurance period – regardless of when the claim event happened.

Professional indemnity policies provide a ‘claims made’ cover, because errors in these professions are often discovered weeks, months or even years after the mistake was made.

This means you must have a current professional indemnity policy or a ‘run-off’ policy in place at the time of the claim, as you won’t be protected by old policies.

Another important note: If the indemnity limit has been changed, it’s the limit in effect when the claim is lodged (ie 2020) that applies – not the limit purchased when the work was done (ie 2017).

Here are two examples from a variety of claims that could occur:

  1. A product marketing supplier accidentally prints 10,000 mugs in the wrong brand colour that a client requested. The client asks the supplier to supply new mugs and at their own expense.
  2. A consultant accidentally forwards confidential information to a client’s competitor. The client takes legal action against the consultant for breach of confidentiality.

To hear more about claims that could pertain to your business or industry, talk to one of our business brokers.

Some businesses may require both types of cover, but they are different.

Public liability covers you in the event of injuries, damages or loss caused in your workplace or services you provide, whereas professional indemnity focuses on the advice you provide, which can happen even after you have completed the work.

Although different, both are equally important to consider if you provide professional advice or services in a specialist or consulting capacity, regardless of the size of your business, or location.

LCPA 23/099

This is a general overview of the policy. Please call us and ask for a copy of the insurer’s policy wording. We recommend you read the policy wording, so you have an understanding of the policy terms, conditions and exclusions before you decide whether this policy suits your needs.

Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“Marsh”) arranges the general insurance (i.e. not the Discretionary Trust Arrangement) and is not the insurer. This page contains general information and does not take into account your individual objectives, financial situation or needs. For full details of the terms, conditions and limitations of the covers, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh on request. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). Any advice or dealing in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). JGS and JLT are businesses of Marsh McLennan. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.