How much does Professional Indemnity Insurance Cost for Real Estate Agents?

How much does Professional Indemnity Insurance cost for Real Estate Agents?

Professional Indemnity (PI) insurance is one of the most essential forms of cover for Real Estate Agents due to the potential for losses that can arise out of acts, errors or omissions from the professional services provided. Depending on the state you operate in, holding a minimum level of PI cover is often a requirement under state or territory legislation, or to become a member of your local Real Estate Institute.

The cost of PI insurance can vary greatly for Real Estate Agents, due to a number of key factors including:

  • Business turnover and size
  • The amount of insurance cover required
  • The individuals being covered – are they qualified for the job they are performing, and do they have a previous history of claims?
  • Individual claims history of the insured

We have put together a snapshot of how much Professional Indemnity insurance can cost for Real Estate Agents using data from BizCover policies sold during the 2016/17 financial year. The sample we analysed includes more than 250 Real Estate Agents in NSW that have ten or fewer employees.

We know, sometimes you just want a quick idea of how much your insurance is actually going to cost.  However, it’s important to note that the data included within this article was sourced from BizCover customer data during 2016/2017 and is intended as a guide only.  It may not reflect pricing for your particular business as individual underwriting criteria will apply.  Get a hassle-free quote for your business here.

What is the average premium for combined Professional Indemnity & Public Liability insurance package?

On average cost of an allied health combined Professional Liability policy is $31.05 per month.. However, a large proportion (59%) of allied health professionals pay only $16-$25 per month.

Here’s a full breakdown:

Chart by Visualizer

*Data based on NSW BizCover customers

How does occupation affect the premium?

‘Allied health’ covers a rather broad range of occupations from those in the hair and beauty industry, the fitness industry, and alternative health industry to occupations such as life coaches, nurses and psychologists. All of these occupations face entirely different risks, which is the main reason for premiums varying so greatly under the allied health group.   Those with a higher perceived risk will understandably pay higher premiums compared to occupations with a much lower risk of a claim occurring.

Below is the breakdown of our top 10 allied health occupations.

Chart by Visualizer

*Data based on NSW BizCover customers

How does revenue affect the premium?

Commonly, the more revenue your business generates, the higher your combined liability insurance premium will most likely be. For example, an allied health professional generating between $50,001 to $100,000 typically pay around $34 per month. The cost of the premium, fortunately, doesn’t increase significantly until an allied health professional starts earning above $100,001 which increases the monthly premium of around $65.

This is mainly because a high turnover indicates that your business is undertaking a greater amount of work, creating a higher exposure to more risks, thus a greater chance that something could go wrong.

Below is the full breakdown:

Chart by Visualizer

*Data based on NSW BizCover customers

Does the size of my business affect the premium?

Similarly, the more employees you have can also demonstrate a higher volume of work, and with more people comes an increased risk of a claim occurring, meaning your premium is most likely to increase as your business grows in size.

Nearly 74% of allied health professionals insured through BizCover are sole traders. They pay approximately $26 per month for their combined liability cover. However, those with one to six employees can pay on average $69 per month, more than 50% increase in price.

Below is the full breakdown:

Chart by Visualizer

*Data based on NSW BizCover customers

Does the level of cover affect the premium?

Fortunately, the cost of Professional Indemnity cover for allied health professionals does not increase too greatly as the level of cover increases. Doubling your level of cover does not mean double the premium.

Results from BizCover data shows that $1 million is the most popular level of Professional Indemnity cover taken out within a combined liability policy, with an average monthly premium of $28.05. While those holding $5 million of cover are only paying around $36.13 per month.

Average monthly cost of Allied Health combined liability insurance by level of cover

Coverage level Average monthly premium
$1 million $28.05
$1.5 million $26.49
$2 million $35.14
$2.5 million $49.53
$3 million $61.81
$5 million $36.13
$10 million $49.39

*Data based on NSW BizCover customers

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