Professional Indemnity

What is Professional Indemnity insurance?

Professional Indemnity insurance is a type of liability insurance that provides cover for the financial consequences of neglect, error or omission by the professional or firm taking out the policy. If a third party makes a claim against any wrong-doing, mistake or breach of professional duty on your part, then this type of insurance may protect the assets and reputation of your business.

Why is Professional Indemnity insurance important? 

What is typically included in your Professional Indemnity insurance? 

• Misleading or negligent advice. For example, if a psychologist treating a client with anxiety offers advice that inadvertently worsens the client's condition, leading to a claim of professional misconduct, this policy may provide coverage. 

• Defamation. For example, if a management consultant inadvertently makes a damaging remark about a client in a public email, they may be protected against potential defamation lawsuits. 

• Loss of Documents. For example, if a tax agent loses important financial documents, they might be covered for the expenses of restoring or replacing them. 

• Public Relations Costs. For example, if a building designer faces a lawsuit for alleged negligence, public relations coverage may assist with the costs of a campaign to restore their public image. Note: this does not apply to Mortgage or Finance brokers.  

• Intellectual Property Infringement. For instance, if a building designer inadvertently incorporates a copyrighted design element into their plans, this cover may protect them from IP infringement claims. 

• Joint Venture Liability. For example, if a psychotherapist enters a joint venture with a healthcare clinic to provide mental health services, they may be protected against liabilities related to that venture. 

• Statutory Liability Cover. For example, if a psychologist is fined by a healthcare regulator for non-compliance with statutory regulations, they may be protected under this cover.  

• Emergency Costs. The policies typically include provisions to cover emergency costs that may arise before consent can be obtained from the insurer. This cover offers a layer of financial security against specific risks that professionals may face in their business operations, ensuring they can continue to work with peace of mind. However, it is recommended that advice should always be sought from the insurer before incurring additional costs. 

Is it possible to combine Public Liability with your Professional Indemnity insurance?

Yes. For certain occupations, such as Psychologists and other Healthcare Professional, Public Liability is automatically combined into their Professional Indemnity policy, whilst for others such as Mortgage Brokers, it is optional. Public Liability protects your business against claims for personal injury or property damage. For example, if a client slips and falls within your practice, this may help protect you against any claims resulting from injury. 

If you are an AHPRA or Non-AHPRA regulated Healthcare Professional, please visit our dedicated Healthcare Civil Liability page to learn more about the details of this policy.

What is typically not covered in a Professional Indemnity insurance policy? 

• Any claims not directly resulting from the provision of professional services specified in the policies. 

• Known claims and circumstances that may have occurred prior to taking cover. 

• Dishonest, fraudulent, criminal, or willfully reckless acts or omissions by the insured. 

• Claims arising from any actual or alleged abuse committed by an insured person. 

• Claims arising from the actual or alleged bankruptcy, insolvency, administration, or receivership of the insured entity. 

• Any claims resulting from the insured being under the influence of alcohol, illegal drugs, narcotics, or intoxicants. 

• Claims that arise outside the territorial limits specified in the policies. 

What type of businesses need Professional Indemnity insurance?