Insurance Broker Professional Indemnity Insurance

For small brokerages with income under $500,000, PI insurance typically costs between $3,000 and $8,000 per year. Mid-size brokerages can expect premiums from $10,000 to $30,000, while larger operations pay significantly more. Premium depends heavily on revenue, client mix, claims history and the limit of indemnity selected. Request a free quote through Shielded for accurate pricing.

The most common claims involve failure to arrange adequate cover - either by not placing a policy at all, arranging insufficient limits, omitting key extensions, or failing to advise the client about important exclusions. These claims typically emerge when the client suffers a loss and discovers their insurance does not respond as expected.

Yes. If a client alleges that you failed to arrange adequate sums insured - for example, insuring a property for $2 million when the replacement cost was $3.5 million - and they suffer a loss that is not fully covered, your PI insurance responds to the claim for the shortfall. Underinsurance claims are common and can be substantial.

The appropriate limit depends on your client base and the values of the insurance programmes you arrange. Small brokerages typically carry $2 million to $5 million. Mid-size firms commonly hold $5 million to $10 million. The limit should reflect your largest potential exposure - consider the value of your largest client's insurance programme and the potential gap if something went wrong.

Yes. Most broker PI policies cover the cost of responding to AFCA complaints, including legal and consulting costs, and any compensation ordered by AFCA. Notify your insurer promptly when an AFCA complaint is received to ensure it is covered under the current policy.

In Australia, the terms are largely interchangeable. Professional indemnity insurance and errors and omissions insurance both cover claims arising from negligent professional services. Some international markets use the term E&O more commonly, while PI is the standard terminology in Australia. The coverage provided is essentially the same.

Typically, authorised representatives (ARs) are covered under the AFSL holder's PI policy. However, the scope and adequacy of that cover can vary. ARs should obtain confirmation from the licensee that the PI policy covers their activities and understand any excess or sub-limit that may apply to their claims. Some ARs choose to arrange supplementary cover for additional protection.

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.