About Professional Indemnity Insurance
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.
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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.
But even in cases where it’s not required by law, it’s recommended for anyone who is providing professional services or advice in exchange for a fee – like, graphic designers, IT consultants and more. Regardless of your legal obligation, it’s often a customer requirement that you have this cover in place.
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➤ in fact
“If you own a business, you can be liable for damages or injuries to another person or property... consider [professional indemnity insurance] for your business if the likelihood of legal action is high.”
Australian Government, Business.gov.au
Case Study
Michael is an engineer who designs the supporting foundations of a residential property. He makes an error with the site calculations – which leads to the slab cracking and damage to the property of the owner. His company is liable for this loss, which could be anywhere between $150,000 up to the full value of the house.
But because Michael has professional indemnity insurance, he’s covered for this amount – as well as any legal expenses if the matter goes to court.
Did you know?
27.7%
701,000
$1,362m
In 2014 alone, professional indemnity and public and product liability claims increased 27.7%.
(Insurancenews.com.au ‘Claims up, premium down for PI and PL’, 2015)
$1,362 million of gross premium during the 2016 underwriting year.
(APRA, National Claims Policy Database, 2017)
701,000 PI risks written in the 2016 underwriting year.
(APRA, National Claims Policy Database, 2017)
What can it cover?
As a wide-ranging insurance solution, professional indemnity cover may include anything from accidents to errors and omissions.
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Important note
This information is provided to assist you in understanding some terms, implications and common considerations of Professional Indemnity Insurance, it is not complete, so please request full details from your Steadfast insurance broker. You should consider the Product Disclosure Statement (PDS) in deciding whether to buy (or continue to hold) this insurance and also whether this insurance is appropriate for you. The PDS can be obtained from Sky Financial Group. Deductibles, exclusions and limits apply. Professional Indemnity Insurance is issued by various insurers.
Sky Financial Group is an Authorised Representative of Fay Baker 79619240801 - 336757