Professional Indemnity Insurance

Anyone can make a mistake – but if your business is found liable for negligence, the costs can be financially devastating. Not only can it lead to an expensive lawsuit, but you’re the hard-earned reputation of your business may be damaged as a result.

That’s why professional indemnity insurance matters – for help protecting your assets and brand if your advice or insurance causes a client to take legal action against you.

At DKG Insurance Brokers, we understand that the needs of each client are different, therefore we will take the time to assess your individual risk requirements and deliver a bespoke solution. Please reach out to one of our experienced brokers today.

Important note − The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about professional indemnity insurance, please consider the Product Disclosure Statement.

“If you own a business, you can be liable for damages or injuries to another person or property…consider professional indemnity insurance for your business if the likelihood of 
legal action is high.”
Australian Government, Business.gov.au

Professional indemnity insurance is mandatory in some industries, such as medicine, accounting, law and financial advisers – with the requirements differing from state to state.

But even in cases where it’s not required by law, it’s recommended for anyone who is providing professional services or advice in exchange for a fee, such as graphic designers, IT consultants and more. Regardless of your legal obligation, it’s often a customer requirement that you have this cover in place.

Important note − The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about professional indemnity insurance, please consider the Product Disclosure Statement.

“If you own a business, you can be liable for damages or injuries to another person or property…consider professional indemnity insurance for your business if the likelihood of 
legal action is high.”
Australian Government, Business.gov.au
27.7%

In 2014 alone, professional indemnity and public and product liability claims increased 27.7%.

(Insurancenews.com.au ‘Claims up, premium down for PI and PL’, 2015)

$1,362m

$1,362 million of gross premium during the 2016 underwriting year.

(APRA, National Claims Policy Database, 2017)

701,000

701,000 professional indemnity risks written in the 2016 underwriting year.

(APRA, National Claims Policy Database, 2017)

Important note − The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about professional indemnity insurance, please consider the Product Disclosure Statement.

“If you own a business, you can be liable for damages or injuries to another person or property…consider professional indemnity insurance for your business if the likelihood of 
legal action is high.”
Australian Government, Business.gov.au

As a wide-ranging insurance solution, professional indemnity cover may include anything from accidents to errors and omissions. Depending on your policy, professional indemnity insurance can cover:

Type of cover Potential benefits
Civil liability Civil liability to a third party arising out of the conduct of their professional business.
Inquiry costs The cost of defending an inquiry by a regulatory body into the professional conduct of the insured.
Defence costs The costs involved in defending a claim triggered by the policy.
Fidelity cover Direct financial loss of the business caused by the dishonest or fraudulent conduct of an employee which is first discovered during the period of insurance.
Advancement of costs and expenses Additional costs and expenses incurred during a claim.

What usually isn’t covered?

Exclusions, the excess you need to pay and limits of liability can vary greatly depending on your insurer. Policies generally won’t include cover for:

  • Contractual or commercial liabilities.
  • Liability which results from fraud and dishonesty.
  • Pollution.
  • Depending on your occupation, third party bodily injury/property damage.
  • Unpaid fees.

Important note − The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about professional indemnity insurance, please consider the Product Disclosure Statement.

“If you own a business, you can be liable for damages or injuries to another person or property…consider professional indemnity insurance for your business if the likelihood of 
legal action is high.”
Australian Government, Business.gov.au

Michael is an engineer who designs the supporting foundations of a residential property. He makes an error with the site calculations – which leads to the slab cracking and damage to the property of the owner. His company is liable for this loss, which could be anywhere between $150,000 up to the full value of the house.

But because Michael has professional indemnity insurance, he’s covered for this amount as well as any legal expenses if the matter goes to court.

Important note − The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about professional indemnity insurance, please consider the Product Disclosure Statement.

“If you own a business, you can be liable for damages or injuries to another person or property…consider professional indemnity insurance for your business if the likelihood of 
legal action is high.”
Australian Government, Business.gov.au