IT Consultant Professional Indemnity Insurance

For sole IT contractors and small consultancies with revenue under $300,000, PI insurance typically costs between $800 and $2,500 per year. Mid-size IT businesses can expect premiums from $3,000 to $10,000 depending on revenue, services provided and claims history. Larger firms with higher revenue and complex service offerings pay more. Request a free quote through Shielded for accurate pricing.

Yes. If your professional negligence - such as misconfiguring a firewall, failing to patch a known vulnerability, or inadequate security design - leads to a data breach at your client's organisation, and the client claims against you for their losses, your PI insurance responds. However, PI does not cover your own data breach losses - you may need a separate cyber liability policy for that.

Yes. If a client claims that your software development or implementation project failed to deliver the agreed functionality, was not completed on time, or was abandoned, and they suffered financial loss as a result, your PI insurance covers the cost of defending the claim and any damages awarded, up to the policy limit.

The appropriate limit depends on your project values and client requirements. For small IT businesses, $1 million to $2 million is common. Mid-size firms typically carry $2 million to $5 million. Government contracts and large enterprise engagements often require $5 million to $10 million. Your broker can help assess the right limit based on your contract portfolio.

Most IT consultant PI policies include cover for claims alleging that your work (such as software code) infringes a third party's intellectual property rights. This is an important coverage element for software developers and technology consultants. Check your policy wording to confirm IP infringement is covered.

Yes. Sole IT contractors face the same professional liability exposures as larger firms - a single project failure, data loss or security incident can generate a claim that exceeds your personal financial capacity. Many clients will not engage an IT contractor who does not hold PI insurance, regardless of how the engagement is structured.

PI insurance covers claims from your clients alleging that your professional services were negligent - for example, a misconfigured system or failed project. Cyber liability insurance covers your own business's losses from cyber events such as data breaches, ransomware attacks and business interruption. IT consultants often need both - PI for third-party claims arising from their professional work, and cyber liability for their own business exposures.

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.