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Professional Indemnity Insurance for Small and Medium Businesses

Learn why professional indemnity insurance, also known as errors & omission insurance, is such a valuable preventative measure for your small or medium-sized business.

Professional indemnity insurance is one of the most important forms of cover for businesses and professionals who offer advice or a service to clients and customers. It can help protect a business against allegations of incorrect advice, breach of professional duty or negligence from a third party (usually a client). Professional indemnity insurance may help cover settlements judgements, investigation costs and defence costs in relation to claims or action made against a business.



What is professional indemnity insurance?

For professionals and businesses, offering advice and consultation services to clients is often a key part of your everyday work. If a client claims that an error in the advice or service they received from a professional has caused injury, damage, or financial loss, that business may be held to compensate for any losses suffered as a consequence. Also, as a sole trader, professionals may be legally and financially responsible for all aspects of a business, potentially putting personal assets at stake.

Even if a claim appears to be without substance, substantial legal costs can be incurred in defence of the claim. Resolving a claim can often take months and could put significant financial and operational strain on a business if they didn’t have professional indemnity insurance or were underinsured. 

Who needs professional indemnity insurance?

Any professionals that provide advice or a service as part of their profession should consider arranging professional indemnity insurance. Regardless of your industry, size or experience, no company is immune to the risk of making a mistake, and professional indemnity insurance may be a key measure to help safeguard your future business success. 



Some professionals Marsh can help arrange professional indemnity insurance for include:

Personal Trainers 

Accountants and Bookkeepers

Event Managers

Real Estate Agents

Barristers and Solicitors

Consultants and Business professionals

Beauty and Health Therapists

Music and Singing Teachers

Pet Service proffesionals




Small business owners looking at their professional indemnity insurance

Did you know?

A former client can still make a claim against a business long after the accused professional has stopped providing the specific advice or service. This is more notable in professions such as engineers or consultants when the fault is likely to be seen several years after completing the project when damage may occur.

Marsh recommends professionals consider obtaining a professional indemnity insurance policy with run-off cover. Run-off cover is insurance provided for a period after the initial policy has expired to cover claims made during that time. The time a professional should maintain the run-off cover will vary from service to service and often relates to the statutory limitation periods in place for claims made in relation to that service.

Contact our team to discuss your options and determine the right professional indemnity cover for your business. Get a Quote



Why Marsh?

We are a leading insurance broker and risk management advisor dedicated to helping businesses like yours.

Our brokers work with Australian SMB across nearly all industries and sectors to offer risk management advice and insurance solutions that suit unique risk exposures.

The job of a Marsh insurance broker doesn’t stop once your insurance has been placed. Our team proudly acts as an extension to our client’s businesses to provide ongoing insurance advice and support during reviews, renewal and especially helping clients through a claims process.

Arrange professional indemnity insurance with Marsh

Let us take the insurance burden off you so you can focus on what really matters – running your business. GET A QUOTE



Frequently Asked Questions

What is covered for by professional indemnity insurance?

Some of the areas that can be covered by professional indemnity policies include:

  • Funding or payment of legal costs from the outset of the claim notification
  • Funding or payment of reasonable costs required for a business to investigate a costs associated for an owner or employee to attend court as a witness
  • Funding or payment of settlement costs
  • Compensation orders made against a business or  civil penalties allowable at law
  • Claims against the insured resulting from contractors, sub-contractors and agents conduct

Policy inclusions and coverage limits vary from policy to policy to insurer, and Marsh strongly recommends comparing product disclosure statements before choosing a professional indemnity policy.

What does "Claims Made" mean?

Claims Made is a term used to describe an insurance policy that covers claims which are notified during the policy term. This may not necessarily be the same period in which the accused incident or error resulting in the claim occurred.

Professional indemnity policies provide a 'claims made' basis of cover because advice or service errors in many professions are often discovered weeks, months or even years after the mistake was made.

For example, if a professional made a service or advice error for a client in 2017, but the client did not discover their loss until 2020, the accused professional's 2020 policy would be the correct policy to respond to any resulting claim. Therefore, a professional indemnity policy or 'run-off' policy must be in place for a claim to be met by an insurer.

It’s also important to note that, if the limit of indemnity was changed, it is the limit purchased when the claim is notified that applies, not the limit purchased when the work was completed.  

How much does professional indemnity insurance cost?

There are a number of different factors that may influence the cost of professional indemnity insurance, such as the service provided, company size and revenue.  

Make sure when requesting a quote, that the declared values of the business is accurate so the correct premium and cover for your business can be arranged. 

Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“MAI”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) which is a related entity of MAI. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh Advantage Insurance on request.