personal indemnity

Managing Risk: Professional Indemnity’s Importance in the Australian Setting

The purpose of professional indemnity (PI) insurance is to assist in defending companies that offer expert counsel or services against allegations of professional negligence. Stated differently, it serves as protection should a client file a lawsuit against you on the grounds that your advice or services resulted in financial loss.

What does Professional Indemnity Insurance cover?

It costs money to be the target of a professional negligence accusation. Regretfully, it can be challenging to get out of a legal situation once you’ve been named in it without having to pay for legal defense costs. By paying for your defense attorney’s fees and any necessary recompense, PI insurance can lessen the financial strain of these circumstances. In the event of a claim, it can also assist in defraying the expense of public relations and the cost of the claim investigation.

Who needs Professional Indemnity Insurance?

PI insurance is crucial for companies that offer expert advice, so it’s always best to entrust to the leading insurance brokerage. Accountants, psychiatrists, architects, consultants, and many others are examples of this, but they’re not the only ones. In many professions, it is even required; the rules and limitations are specified by a central regulatory agency.

Architects & Designers

If a client claims that an architect, designer, or engineer caused them financial harm, they may need to think about getting Professional Indemnity Insurance. Here are a few instances of claims:

  • design mistakes
  • not adhering to council regulations
  • failure to adhere to safety regulations
  • inadequate information in the design papers

Even though there isn’t an organisation that regulates PI insurance needs for designers and architects, it’s still a crucial coverage to take into account. Before engaging or working with you, some clients might ask that you have professional indemnity (PI) insurance. Insurance might also be a prerequisite if you want to join specific industry associations or institutes.

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When it comes to safeguarding accountants’ livelihoods from claims of professional negligence, PI insurance is crucial. One minor error can have a tremendous effect on a client as an accountant handling their money, and if a client does come out with an allegation of professional negligence, the cost to you can also be significant. PI insurance may or may not be required for accountants, depending on the area of accounting. For instance, in fields where registration with a central body or association is mandatory, PI insurance may be required. Therefore, it’s crucial to confirm whether you must maintain PI insurance by contacting your particular central regulating body or organisation.

Issues like these may give rise to claims under accountants’ PI insurance:

  • giving inaccurate tax guidance
  • computation errors
  • false information


The Australian Health Practitioners Regulation Agency (AHPRA) has mandated that psychologists carry professional liability insurance (PI insurance). Psychologists must also register as practitioners with AHPRA in order to be covered by PI insurance. PI insurance assists in paying for claims made by clients who claim that your treatment or advice caused them harm or that it negatively affected their life.

  • not getting informed consent
  • offering assistance outside of your area of expertise
  • revealing private information

Apart from psychologists, many other allied health providers such as chiropractors, occupational therapists, and physiotherapists are also required to have PI insurance.

IT Professionals

Although there is no central body that requires PI insurance for IT consultants, it may still be necessary in order to work with certain clients or on certain projects. IT professionals and consultants should also think about purchasing PI insurance to protect themselves in the event that a client claims their advice or services caused them financial loss. The following are a some of the claims we find for IT consultants:

  • violations of copyright
  • project abandonment
  • lost information

Real Estate Agents

For real estate agents, PI insurance is an essential benefit as well. Real estate professionals are required by law in several areas to carry PI insurance. Professionals who work as real estate agents may face the following kinds of claims:

  • improper property handling
  • false representation
  • neglecting to properly look into the background of tenants
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Do I need professional indemnity insurance as a sole trader?

Every company that employs people, even sole proprietorships, is required to carry workers’ compensation insurance. It can also be necessary for you to obtain professional indemnity and public liability insurance.


Although some of the occupations listed above may require PI insurance, there are many more professions where PI insurance may be necessary or at the very least something to think about. Remember to inquire about any relevant legal requirements with the regulatory organisation for your profession. Of course, it’s always best to connect with the leading insurance brokerage in Sydney, for your trusted financial future. 

Empower your business with professional indemnity insurance

Contact us now for personalised solutions

Contact ii-A