How much does Professional Indemnity Insurance cost for IT Professionals?

As an IT Professional, you are generally required to comply with specific professional standards and legislation which may require you have a minimum amount of PI cover.

There are a number of factors which influence the cost of PI insurance. These factors include things like:

  • 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?

We have put together a snapshot of how much Professional Indemnity insurance can cost for IT professionals using data from BizCover policies sold during 2017. The sample we analysed includes nearly 1000 IT professionals 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 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.

Did you know?

For some IT professional claims there can be a grey area as to whether the claim falls under a Professional Indemnity or Public Liability policy so it’s wise to consider a liability package with combined Professional Indemnity and Public Liability cover from the same insurer. That way there will be no dispute between insurers as to which cover should respond to the claim.

What is the average premium for Professional Indemnity insurance?

On average, IT professionals can expect to pay around $97.88 per month for Professional Indemnity insurance. However, a large proportion of BizCover customers (43%) pay under $75 per month.

Below is the full breakdown:

*Data based on NSW BizCover customers

How does revenue affect the premium?

Typically, the higher the revenue your business generates, the higher your PI insurance premium will most likely be. For example, an IT professional generating between $50,001 to $100,000 could pay around $78 per month, and fortunately the cost doesn’t increase significantly until revenue reaches over $500,000 where an IT professional earning could pay around $317 or more per month.

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 and a greater chance that something may go wrong.

*Data based on NSW BizCover customers

Do the number of employees 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.

Over sixty per cent of IT professionals who hold their PI insurance through BizCover are sole traders. They pay around $87 per month for their PI cover. However, those with three to five employees pay anywhere between $101 to $135 per month.

*Data based on NSW BizCover customers

Does the level of cover affect the premium?

Fortunately, when it comes to Professional Indemnity insurance, however, the cost does not rise too significantly with an increase in the amount of coverage. Double the amount of cover does not mean double the premium.

According to BizCover customer data, $1 million is the most popular level of cover purchased, with the average monthly premium equating to $78.40. Yet, doubling the cover to $2million only increases the premium to between $75.10 and $90.22.

It is important to understand that the cost of Professional Indemnity insurance is not influenced by one factor alone, but by a combination of the key factors mentioned above.

Average monthly cost of Professional Indemnity Insurance by level of cover

Coverage level Average monthly premium
$500k $75.00
$1 Million $78.40
$1.5 Million $75.10
$2 Million $90.22
$3 Million $80.87
$4 Million $72.63
$5 Million $112.30
$10 Million $148.26
$20 Million $185.87

*Data based on NSW BizCover customers

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