Professional Indemnity Insurance

Professional Indemnity insurance may be essential for sole traders and businesses that provide a professional service or advice. You may want to consider Professional Indemnity insurance if you, for example:
• Provide a specialist service or advice
• Handle client information
• Represent a client’s interests on their behalf
• It is required by law or an industry association
• It is required by a client contract

Occupations that often consider Professional Indemnity insurance, include:
• Accountants
• Allied health professionals
• Architects
• Consultants
• Engineers
• Nurses
• Personal Trainers
• Real estate agents
• Registered builders

Professional Indemnity insurance is compulsory for some occupations and industries in Australia. It may be a legal requirement to receive and maintain a professional license or mandatory to join an industry association. Clients may also require minimum Professional Indemnity cover levels by contract.
It is wise to check with your relevant industry body to understand the insurance requirements in your state or territory.

Different factors may impact the amount of Professional Indemnity cover your business needs, such as:

• The industry you work in
• Licensing and/or contract obligations
• The size of your business, i.e. your annual turnover or size of contracts you accept
• How many people are covered, i.e. a sole trader or a business with multiple employees

BizCover offers Professional Indemnity options with cover up to $10 million to suit small businesses of different sizes and working in different industries

For allied health professionals, Professional Indemnity insurance extends to provide cover for bodily injury or illness claims arising from the professional services covered by the policy.

The main difference between Professional Indemnity and Public Liability insurance is the risks that each type of policy covers.

Professional Indemnity insurance is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. PI Insurance will also assist with the legal costs associated with responding to or

managing claims which are covered by the policy. Public Liability covers you if a third-party claim that your negligent business activities caused them injury or property damage. This includes defence costs cover

The main difference between a Professional Indemnity and a Management Liability policy is the risks that each cover.

Professional Indemnity protects you against losses claimed by a third party due to alleged or actual negligence in your professional services or advice. Subject to applicable limits, your Professional Indemnity insurance will meet the associated compensation payable to a third party together with your defence costs (which can include legal costs, investigator costs and expert fees).

Management Liability covers claims of wrongful acts in the management of the insured business and can include directors and officers liability, employment practices liability, crime, statutory liability and tax audit.

Sole traders may need Professional Indemnity insurance to maintain a professional license, become a member of an industry association, or meet the terms of a client contract. They may also consider a Professional Indemnity policy to help them manage the cost of common claims, like providing incorrect advice, accidental omissions in their work, or unintentional contract breaches

Yes, you may need Professional Indemnity insurance if you work from home. Professional Indemnity requirements typically depend on what you do, not where you work. If you need a policy to become licensed, meet industry standards, or because it is required by contract, then these requirements will likely apply even if you work from home.

Claims-based and occurrence-based policies are two different ways that an insurance policy may handle potential claims. A claims-based (or claims-made) policy provides cover when a claim is first made against a business during the policy period. Claims are only covered if a claim is notified or submitted while the policy is active. You cannot claim after the policy has lapsed. Professional Indemnity polices are typically claims-based policies.

Professional Indemnity insurance covers personalised services and advice. Because these types of services can have long-term consequences, clients may pursue legal action months or years after you’ve worked with them. A claims-based policy helps protect you when it may be difficult to determine exactly when a loss occurred.

An occurrence-based policy provides cover when incidents occur during the policy period, regardless of when a claim is made. You may be able to make a claim after the policy is cancelled. Public Liability insurance is a common type of occurrence-based policy.

A retroactive date is the date from which your Professional Indemnity policy will cover you and your business. This retroactive cover provides protection for claims arising from work completed before the start of the current policy period. Some Professional Indemnity policies will have unlimited retroactive dates that cover services performed any time In the past, so long as you make a claim while the policy is active.

BizCover is here to assist you with Professional Indemnity claims and make the process as drama-free as possible.
To start the claims process, complete our claims form online any time, 24/7. We’ll coordinate your claim with the insurer and notify you of the outcome via email or phone.