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 |

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?
Marsh is not an insurer. We are a leading insurance broker and risk management advisor dedicated to helping businesses like you.
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
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.