Professional Indemnity (Liability)
Sunshine Coast Insurance Brokers
We all make
mistakes and some mistakes can be costly. Like the building
designer who was sued for $1 million worth of design defects in a
commercial development. Luckily, the company had professional
indemnity insurance and was able to claim the full amount on their
policy. Without this insurance, the designers would have incurred
a massive financial loss, which might even have caused their business
If you’re a business owner, professional indemnity insurance can
similarly help protect you against the financial consequences of any
mistakes you or your staff might make. It also protects against
accusations that you’ve done something wrong, even if you haven’t.
Who is a Professional?
Think of a professional and you’re likely to conjure up an image of the
typical office worker: an accountant, lawyer or architect.
But as far as professional indemnity insurance is concerned, a
professional is anyone who is relied upon for their expertise.
That could be a surveyor, engineer or IT consultant. A
naturopath, real estate agent, personal trainer, or management
consultant could also be considered to provide professional services,
as could a yoga instructor or a reiki healer.
How does Professional Indemnity Insurance work?
Professional Indemnity protects business owners against:-
- Allegations of negligence, and
- Claims of malpractice and professional misconduct.
Professional indemnity insurance protects policyholders against two
types of financial loss:
- The legal costs of investigating and defending a claim made
against you and/or your business, and
- Any amounts payable in relation to the claim.
Examples where Professional Indemnity Insurance could apply include:-
- An accountant who incorrectly advises a client that an expense is
- A chiropractor who manipulates a client’s back and causes injury
- A beautician who applies a facial treatment to a client which
damages the client’s skin
- A solicitor who provides incorrect legal advice
- A financial adviser who recommends investments which don’t match
a client’s risk profile
Purchasing Professional Indemnity Insurance
Professional indemnity insurance is a specialist area and should be
arranged through an insurance broker with expertise in this field.
You and your broker should discuss:-
- The level of insurance cover you require. Some professions
have governing bodies that set strict guidelines specifying the level
of professional indemnity cover required to trade, and some contracts
for services specify a minimum level of professional indemnity
cover. In these situations, be sure to comply with the specified
level of cover.
- The relevant excess (the amount you need to pay when you make a
claim before the insurance kicks in).
- The entities and people that should be insured under the policy.
Comsure Insurance Brokers can help mitigate your risks and minimise
what can be a significant financial impact on your business should the
unexpected happen. Professional indemnity insurance forms part of a
comprehensive insurance program that we can help you to develop for
your business. If you would like to know more or discuss this
further, please get in contact.
Business that provide professional advice
|Heath Care providers
|| Management Consultants
|Auditors and Accountants
||Real Estate Agents
||Information Technology Companies
|Health & Safety Trainers
Difference between Professional Indemnity and Public Liability
Professional Indemnity insurance covers your legal liability arising
out of the professional advice you provide to your customers. If you
are not providing professional advice you do not require Professional
For example, a client slipping and falling in a doctors’ surgery would
be a public liability claim. But if they are injured because the
doctor failed to diagnose their illness correctly, then that would be a
professional indemnity claim.
As your insurance broker, we can help to mitigate your risks and
minimise what can be a significant financial impact on your business
should the unexpected happen.