Professional indemnity insurance protects Australian service providers from claims of negligence, helping manage legal risks and safeguard business reputation.

Professional indemnity (PI) insurance provides financial protection for businesses and individuals who offer professional advice or services. It covers legal costs and compensation claims arising from alleged negligence, errors, omissions, or breaches of duty in the course of delivering those services.

This type of insurance is essential for professionals whose clients rely on their expertise. Even if a claim is unfounded, the cost of defending it can be significant. PI insurance ensures that legal expenses, settlements, and court-awarded damages are covered, allowing professionals to focus on their work without the constant threat of litigation.

Typical coverage includes:

• Negligent advice or misstatements
• Breach of professional duty or confidentiality
• Defamation and reputational harm
• Legal defence costs and investigation expenses
• Claims arising from past services (if retroactive cover is included)

Professions that commonly require PI insurance include:

• Accountants, financial planners, and legal practitioners
• Architects, engineers, and surveyors
• IT consultants, marketing professionals, and ESG advisors
• Healthcare providers and allied health professionals

In many industries, PI insurance is a regulatory requirement. For example, financial advisers must carry a minimum of $2 million in cover per claim to comply with ASIC regulations. Policies are typically written on a claims-made basis, meaning they only cover claims made while the policy is active—making continuous coverage and run-off protection critical.

Without PI insurance, a single claim could result in severe financial loss, reputational damage, or even business closure. It is not just a legal safeguard—it is a strategic tool for risk management and professional credibility.