What is Professional Indemnity Insurance?
PI insurance generally indemnifies the insured for a claim that is first made while the policy is in force as a result of a breach of professional duty in respect of the conduct of the professional business.
This class of insurance is written on a 'claims-made basis'. This means that the policy provides cover for claims made during the period of insurance in respect of professional services provided after the retroactive date, subject to the terms and conditions of the policy in place at the time. The retroactive date will be specified in the policy schedule.
All PI insurance policies will have a 'limit of indemnity' and a 'deductible' or ‘excess’. The limit of indemnity is the maximum amount that the insurer will pay for any one claim.
The deductible applies for each claim such that the amount of each claim up to the deductible must be paid by the insured.
More Information can be found on our FAQ page.
Professional Indemnity Insurance
Professional Indemnity Insurance is a type of insurance aimed at businesses and business professionals in industries where their customers may rely and make decisions based on their professional advice. As an 'expert', others may seek legal action against you if they suffer a loss from your professional advice. Professional Indemnity Insurance thus provides financial protection and can help you manage your risk exposure.
Businesses that provide a professional service (e.g. accountants, IT professionals, consultants, bookkeepers, etc.) are regarded by their clients as experts in their fields. In the litigious Australian context, clients will not hesitate to make a claim against these 'experts' when they believe they have suffered as a result of their actions.
Many professional bodies require Professional Indemnity Insurance as a pre-requisite to obtaining a practicing certificate or membership to the association.