Business Insurance
Professional Indemnity Insurance
When clients rely on your expertise, an alleged error can lead to a demand for financial loss—even when you believe your work was sound. Professional indemnity insurance may help with covered civil liability claims arising from your professional services.
What it can cover
Subject to the policy’s definition of professional services, cover can include:
- Claims alleging negligent advice, design errors or omissions in your services.
- Defence costs and settlements or damages for covered claims.
- Certain breaches of confidentiality or unintentional intellectual property infringements, where expressly included.
Common risks and exposures
An incorrect specification, missed deadline or unsuitable recommendation can create loss for a client. Disputes may surface long after work is delivered. Subcontracted services, changing scopes of work and contracts that promise a particular outcome deserve close attention.
Who may need this insurance
Consultants, designers, engineers and other businesses providing specialist advice or services may need to consider professional indemnity. Professional requirements and client contracts can influence limits, but the cover still needs to reflect the work actually performed.
What KIB Group considers
- A clear description of your services, qualifications, client sectors and subcontractor arrangements.
- Retroactive dates, continuity of cover and any past claims or circumstances that could lead to a claim.
- Contract terms, territorial and jurisdictional limits, and whether defence costs reduce the limit available for damages.
Exclusions and considerations
Many policies operate on a claims-made-and-notified basis, making the timing of a claim and notification important. Known circumstances, work before a retroactive date, guarantees and liabilities accepted solely by contract may be excluded. Notify potential claims promptly and check the wording before admitting liability or agreeing a settlement.
Questions worth asking
What does claims-made-and-notified mean?
It generally means a claim must first be made against you and notified to the insurer during the policy period, subject to the wording and applicable law. It is not simply the date you did the work. Report claims and circumstances promptly rather than waiting for renewal.
Do I need to consider cover after I stop practising?
Yes. A claim may arise after a business closes, is sold or stops providing a service. Run-off arrangements may address eligible claims about earlier work. The period, retroactive date and scope need review before existing cover ends.
Related insurance
Already need to notify a claim? Professional indemnity claim or circumstance notification.
Cover starts with a conversation.
Talk with our Melbourne-based team about your business, wherever you operate in Australia.
This is general information, not personalised financial product advice. Cover varies and is subject to policy terms, conditions, limits and exclusions. Consider the relevant policy wording and your circumstances before deciding; an enquiry does not bind cover.
