Professional Indemnity (PI) Insurance is a specialised insurance coverage designed to protect professionals against claims of negligence, errors, and omissions arising from the services that they provide. We get it - this sounds a little complex! So let’s dig a little deeper to explain:
- Why is PI Insurance Important?
- Who needs PI Insurance?
Why is Professional Indemnity Insurance Important?
As a skilled professional, you have a wealth of knowledge and experience within your area of specialisation, and clients pay a fee to engage your services. According to Australian Law, this translates to a legal expectation that:
- You will deliver the services they pay for to the agreed quality and timescale.
- Any advice you provide will be accurate, complete, and appropriate for their circumstances.
Unfortunately, things can go wrong however and if your client suffers a financial loss resulting from the work you’ve done for them or the advice you’ve provided, they can take legal action against you. What’s scary, is that whether the claim is actual or alleged, the legal fees incurred in a bid to defend yourself, can add up to tens or even hundreds of thousands of dollars.
Professional Indemnity Insurance is designed to provide financial protection to professionals, such as consultants, advisors, and service providers should an error, omission, negligence, or breach of duty occur resulting from the services or advice provided.
If someone sues or makes a complaint against you that calls your professional service into question, PI Insurance can cover:
- Losses or damages incurred by the client as a result of your service,
- Legal costs incurred to defend the claim against you (actual or alleged),
- Costs to repair your reputation.
Who Needs Professional Indemnity Insurance?
Certain professions in Australia must maintain minimum levels of PI coverage as outlined by state or federal laws, professional governing bodies, or industry associations. Occupations in Australia falling under this obligation include:
- Accountants
- Architects
- Draftsmen
- Bookkeepers
- BAS and tax agents
- Electricians in QLD
- Finance and mortgage brokers
- Plumbers in VIC
- Real estate agents in NSW
- Registered migration agents
PI Insurance is akin to a safety net for when things don't go exactly as planned. Instances where this coverage can provide protection are:
- A breach in contract: Your customer may suffer a loss as you did not make the original agreed deadline of a project.
- Mistakes in the provision of professional advice: A client may suffer financially and claim losses against you due to an engineering miscalculation or an incorrect financial assessment.
iNeedCover Keep Professional Indemnity Insurance Simple
Given the intricacies of Professional Indemnity Insurance and the range of professions it covers, seeking guidance from an iNeedCover Advisor can help ensure you get the right amount of cover and policy conditions suitable to protect your business from a major financial loss if faced with a claim of professional negligence.
By engaging a professional advisor, you’ll gain access to the whole insurance market (not just what’s on Google), plus broker-exclusive premium rates. And because we work for you, not the insurer, we’ll compare the various policy options available, making recommendations on the most suitable one to protect your business.
With iNeedCover, you're not just buying insurance; you're gaining a knowledgeable ally, a dedicated advocate, and a trusted advisor who works in your best interests.
Pair up with your perfect advisor, so you can focus on what you do best.
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