What Is Professional Indemnity Insurance?
Professional Indemnity Insurance (also known as PI Insurance or Errors and Omissions cover) is a form of liability insurance that protects professionals and their businesses against potential risks of claims arising from advice and services provided to their clients.
In simpler terms, if your client suffers loss, be it financial, material or intangible due to your professional negligence or malpractice, Professional Indemnity Insurance covers the legal costs and expenses involved in your defence, as well as any damages or costs that may be awarded.
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 your business’ hard-earned reputation may be damaged as a result.
That’s why Professional Indemnity Insurance matters – for help protecting your assets and brand if your advice causes a client to take legal action against you.
One of AIB’s expert business insurance brokers can help you find a policy that is best suited to your industry, budget and needs.
Who Should Consider It?
Professional Indemnity Insurance is mandatory in some industries, such as medicine, accounting, law and financial advisers – with the requirements differing from state to state in Australia. However, any professional providing expert advice or services in exchange for a fee should consider purchasing PI Insurance. This is especially important for people in roles like consultants, accountants, IT specialists, engineers, architects, lawyers, doctors, and other medical professionals. Freelancers, contractors, and self-employed individuals providing professional services should also think about this coverage. Not only can it offer financial protection, but it can also significantly enhance your credibility as a professional. Some professional bodies and regulators may also require you to hold a certain amount of Professional Indemnity cover.
To ensure you have the right insurance cover for your business, talk to one of our expert business insurance brokers and get the peace of mind that you have the right insurance cover, tailored to your specific needs.
The insurance brokers at AIB have vast experience with Professional Indemnity Insurance policies and we can ensure you have the cover you need.
What It Can Cover
The primary purpose of Professional Indemnity Insurance is to provide cover for liability arising from a breach of professional duty.
Obviously every policy is different and your AIB insurance broker can help you find one that suits your specific needs. Depending on your policy, Professional Indemnity Insurance can cover:
Civil Liability Claims
Covers costs that your business would incur if you need to defend and settle claims from third parties alleging negligence or breach of duty, unintentional infringement of intellectual property, unintentional defamation or loss of or damage to documents.
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.
Public Relations Expenses
Covers the cost of engaging a public relations consultant (within reasonable limits) to help reduce damage to your reputation following a claim against your business.
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.
However it doesn’t cover areas such as commercial liability or accidental personal injury or property damage and it’s important to note that this PI Insurance is a different cover from Public and Products Liability insurance but often these work hand in hand where advice is being provided to customers.
