Builder Professional Indemnity Insurance

Residential builders typically pay between $2,000 and $8,000 per year for PI cover with limits of $1 million to $5 million. Commercial builders working on larger projects may pay between $8,000 and $30,000 or more per year depending on revenue, maximum project value and claims history. Builders with prior defect claims face higher premiums.

No. Home Building Compensation (HBC) insurance, formerly known as Home Warranty Insurance, protects homeowners if a builder dies, disappears or becomes insolvent before completing work or rectifying defects. PI insurance protects the builder against professional negligence claims. They serve different purposes and both may be required depending on the work undertaken.

Yes. PI insurance is written on a claims-made basis, meaning the policy in force when the claim is made responds. Building defects can emerge years after completion, so maintaining continuous PI cover is essential. Statutory defect liability periods in Australia range from two years for minor defects to six or more years for major structural defects depending on the state.

Yes. Waterproofing failures and cladding defects are among the most common PI claims against builders. If you coordinated, specified or supervised the waterproofing or cladding installation and a defect claim arises, your PI policy covers the legal defence and any damages. Given the significance of these risks, ensure your sums insured are adequate.

Only if your PI policy explicitly covers design liability. Standard builder PI policies may be limited to construction coordination and project management. If you offer design-and-build contracts, you must disclose this to your insurer and ensure the design component is covered. Premiums will be higher to reflect the additional design risk.

This depends on project types and values. Residential home builders typically select $1 million to $5 million. Commercial builders should consider $5 million to $10 million. Builders working on high-value multi-residential or mixed-use developments may need $10 million to $20 million. Always check contractual requirements and any state licensing minimums.

Yes, though prior claims will increase premiums and may result in higher excess levels or specific exclusions. At Shielded, we work with domestic insurers, specialist underwriting agencies and Lloyd's of London syndicates experienced in covering builders with claims history. Full disclosure of all prior claims and circumstances is essential when applying.

Professional indemnity (PI) insurance protects professionals and businesses against claims arising from negligent acts, errors, omissions or breaches of professional duty in the provision of services or advice. It covers legal defence costs, settlements and damages awarded against you. PI insurance operates on a claims-made basis, meaning the policy in force when the claim is made responds – not the policy in force when the work was performed.

Any professional who provides advice, designs, recommendations or services to clients should carry PI insurance. This includes accountants, architects, engineers, lawyers, financial planners, mortgage brokers, IT consultants, real estate agents, builders, health practitioners, management consultants and many more. For many professions, PI insurance is mandatory under Australian legislation or industry body requirements.

PI insurance premiums depend on your profession, annual revenue or fee income, claims history, limit of indemnity required and the scope of services you provide. A sole practitioner consultant might pay $500 to $2,000 per year for $1M cover, while a mid-size engineering or accounting firm could pay $5,000 to $20,000+ for $5M to $10M cover. High-risk professions like financial planning or building design attract higher premiums.

PI insurance typically covers legal defence costs (solicitors, barristers, court fees), damages or settlements awarded to the claimant, investigation costs from regulatory bodies, breach of professional duty, negligent acts or omissions, unintentional breach of confidentiality, loss or damage to client documents, and defamation arising from professional activities. Cover extends to past work through retroactive dates.

Yes, for many regulated professions in Australia. Mandatory PI insurance requirements apply to solicitors, financial advisers (AFSL holders), mortgage brokers, accountants (registered tax agents), architects, building practitioners in most states, real estate agents, migration agents, customs brokers, and various health practitioners. Requirements vary by state and professional body – check your specific obligations.

Professional indemnity covers financial loss caused by your professional advice or services – for example, an accounting error that costs a client money. Public liability covers physical injury or property damage caused by your business operations – for example, a client tripping over a cable in your office. Most professionals need both, but they cover fundamentally different risks.

PI insurance operates on a 'claims-made' basis, meaning the policy that responds is the one in force when the claim is first made or notified – not the policy that was in force when the work was performed. This is why continuous, unbroken cover is essential. If you change insurers or let your policy lapse, you may lose cover for past work. Run-off cover is available for professionals who retire or close their practice.

The limit of indemnity you need depends on your contractual obligations, regulatory requirements and risk exposure. Many contracts require $1M, $2M, $5M or $10M minimum cover. Regulatory requirements vary by profession – for example, AFSL holders have specific minimums set by ASIC. Consider your largest client contracts and the potential financial impact of a claim when selecting your limit.

Contact us at Shielded Insurance on 1800 97 98 99 or your insurer directly. With PI insurance, early notification is critical – you must notify your insurer of any claim or circumstance that could give rise to a claim as soon as you become aware of it. Late notification can jeopardise your cover. Never admit liability or attempt to settle a claim without insurer approval.

We access a broad range of Australian domestic markets, specialist underwriting agencies and international capacity including Lloyd's of London syndicates. This allows us to place cover for standard professions through to complex or hard-to-place risks. As brokers, we compare multiple options to find competitive and suitable cover for your profession and risk profile.