Professional Indemnity Insurance
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What is Run-Off Cover
Last Updated: July 29, 2025Run-off cover is a type of insurance that kicks in after you stop working, retire, or sell your business. Run-off cover extends a claims-made insurance policy, protecting you against claims that arise from past work, even when you are no longer operating. It’s most often used with Professional Indemnity Insurance, which only responds to claims made during the policy period. Without run-off, you could be left exposed if a client brings a claim months or even years after your last job. Run-off can usually be arranged as an annual policy or paid up-front for multiple years. It has a step-down premium calculation, with a rough indication being that for 7 years of run-off cover, the premium will be around 4 times your last insurance premium. For example, your final year premium is $2,000. To obtain 7 years of run-off coverage, the premium will be approximately $8,000. If only one year of run-off cover is required, the premium is generally the same as your final year’s premium, which in this case would be $2,000. ** Note that each insurer operates differently and may offer amounts that differ from the indicated amount. ** Run-off is a smart way to protect your legacy...
Is IT Liability the same as Professional Indemnity Insurance
Last Updated: June 19, 2025Not exactly. While Professional Indemnity (PI) Insurance is a key component of IT Liability Insurance, the two are not identical. IT Liability Insurance is a specialised policy designed specifically for professionals in the IT and technology sector. It combines Professional Indemnity and Public Liability insurance under one tailored wording. This dual-coverage approach helps protect against a broader range of risks commonly associated with tech-based services and products. For example, a software error might result in a financial loss for a client, which is covered under Professional Indemnity coverage. At the same time, a hardware failure could cause property damage or injury (covered under Public Liability). If only one policy is in place, there may be gaps in coverage. IT Liability Insurance avoids this by integrating both protections into a single policy that reflects the real-world exposures of tech professionals. So, while Professional Indemnity covers claims for negligence, errors, or omissions in your professional advice or services, IT Liability goes further, addressing the unique blend of liability risks faced by those working in IT, such as developers, consultants, managed service providers, and suppliers of software or hardware. If you work in tech and are asked to hold Professional Indemnity, you will...
When do I pay my Deductible (Excess) in a Professional Indemnity Claim
Last Updated: June 19, 2025In a Professional Indemnity claim, your excess, also referred to as a deductible, is usually payable once the insurer begins incurring costs related to your claim. This may include legal expenses, investigations, or settlement payments, depending on the structure of your policy. There are two main types of excess: Costs ‘Inclusive’ means your excess applies to both defence costs and any settlement amount. You may be required to pay your excess early in the process, once legal expenses begin. Costs ‘Exclusive’ means your excess only applies if the insurer pays a settlement or judgment. In this case, you may not need to pay your excess unless the claim results in a financial payout to the other party, saving you from having to pay your excess towards defence costs incurred on the claim. We will review your policy wording with you and explain when and how your excess applies, so you know what to expect if a claim arises.
How long does a Professional Indemnity Claim take to settle?
Last Updated: August 4, 2025Professional Indemnity claims can generally take anywhere from a few months to several years to resolve, depending on the complexity of the issue. Claims involving legal proceedings, expert witnesses or disputes over liability tend to take longer. We are, however, engaged in some minor matters that can be sorted within a week or two. Once a claim is lodged, insurers will usually act quickly to appoint legal advisors, notify any third parties involved and begin reviewing the circumstances. However, the process often involves: Investigating the details of the claim Reviewing client contracts, communication and deliverables Engaging external experts to provide reports or opinions Negotiating with the other party or their legal representatives These steps can take time, particularly if the matter involves litigation or multiple stakeholders. We will work with you and the insurer throughout the process to make sure your interests are protected and you’re kept up to date. Contact us if you have received a complaint or potential claim and want to understand what happens next.
When does a Professional Indemnity Claim start?
Last Updated: August 4, 2025A Professional Indemnity claim generally starts when you receive a written demand, complaint or notice alleging an issue with your advice, service or professional conduct. This could include: A request for compensation A formal letter of complaint Notification of legal action or proceedings Professional Indemnity policies are issued on a claims-made basis. This means the timing of the work does not determine the cover. Instead, the key factors are: When the claim is made When your policy is active Because of this, it is important to notify us as soon as you become aware of a potential issue, even if no formal claim has been made. Early notification allows your policy to respond and helps preserve your legal position if the matter escalates. Contact us if you think a situation might give rise to a claim or need guidance on next steps.
What happens in a Professional Indemnity Claim
Last Updated: August 4, 2025A Professional Indemnity claim usually starts with an allegation that you have made a mistake, left something out, or breached your professional duty. This could come in the form of a client complaint, demand for compensation or a legal notice. Once the claim is notified, the insurer will typically: Appoint a claims officer or legal adviser to manage the matter Investigate the details of the allegation, including your response and supporting documents Cover your legal defence costs, even if the claim is unfounded Negotiate or pay compensation if the claim is upheld or resolved through settlement These claims can take time to resolve, especially if the issue is complex or involves legal proceedings. We will work with the insurer on your behalf, keep you informed throughout, and support you through each stage of the process. Contact us if you have received a complaint or believe a situation may result in a claim.
How do I notify a Professional Indemnity Claim?
Last Updated: August 4, 2025If you become aware of a potential issue such as a complaint, dispute or request for compensation, it is important to speak with us as early as possible. You do not need to wait for a formal legal claim or a letter from a lawyer. Early indicators of a potential professional indemnity claim may include: A client is raising concerns about your work Refusal to pay an invoice due to dissatisfaction Suggestions that you made an error or caused financial loss To notify a potential claim or circumstance, we will guide you through the process. This may involve providing: A brief description of the issue or allegation Any relevant emails, letters or communication from the client Supporting documents such as contracts, advice given or project notes We will liaise with the insurer, manage the lodgement of a claim form and keep you informed throughout the process. Timely notification is critical. If you are unsure whether something needs to be reported, it is always best to contact us so we can advise you and help protect your position.
Can I change ProfessionaI Indemnity Insurers mid-policy
Last Updated: June 19, 2025Yes, it is generally possible to change insurers at any time, including during the policy term. However, unless there are issues with your current Professional Indemnity policy, it is usually best to wait until your renewal date to avoid cancellation fees or other costs associated with changing mid-term. There may be some viable reasons to change your Professional Indemnity insurer mid-term. These include: Your business operations have changed, and your existing insurer is unable to cover the new work You require a higher level of cover than the insurer is able to provide to you You start operating in a geographical area that the insurer is unable to provide cover for – i.e. a contract is signed for work in North America Before making any changes, it is essential to consider how your previous work will be covered and ensure that the new insurer has an appropriate retroactive date to cover your past work. We can help review your situation and guide you through your options, ensuring a smooth transition and that your cover remains suitable for your business requirements.
Do I need Professional Indemnity Insurance if I’ve never made a mistake?
Last Updated: July 29, 2025Yes. Professional Indemnity Insurance is there to protect you against allegations of negligence, not just actual mistakes. Even if you have done nothing wrong, a client or third party can still make a claim if they believe your advice, service, or work has caused them financial loss. Defending yourself against a claim can be costly, even if it is unfounded. Legal fees, expert reports and time away from your business can quickly add up. This type of cover is especially important if you: Provide professional advice or services Work under contract or are required to hold insurance by clients or industry bodies Operate in industries where trust, expertise and accountability are expected Professional Indemnity Insurance gives you peace of mind that if a dispute does arise, you have financial and legal support in place. Contact us if you would like help reviewing your exposure or arranging the right level of cover.
Does Professional Indemnity Insurance cover Subcontractors or Consultants
Last Updated: July 29, 2025Some Professional Indemnity policies extend to cover subcontractors or consultants who work on your behalf, particularly if they are under your direct supervision or control. In many cases, the policy includes coverage for vicarious liability. This means you are protected if a claim arises from the work of a subcontractor, even if they are not directly named on the policy. However, this does not automatically mean the subcontractor is insured in their own right. They may still need their own Professional Indemnity policy to cover their personal liability and legal costs. Some insurers may also require subcontractors to be specifically listed on your policy to ensure their work is included in the coverage. It is essential to disclose all subcontractors and consultants when arranging or renewing your insurance. This allows the policy to be structured correctly and avoids gaps in coverage. To learn more, visit our comprehensive page on engaging subcontractors. Contact us if you use subcontractors and want to make sure everyone involved is properly protected.
How long does it take to get a Professional Indemnity quote?
Last Updated: July 29, 2025We aim to provide Professional Indemnity quotes within one to two business days. If your business is part of an established insurance scheme, pricing may be available on the same day. For more complex risks, new ventures, or occupations outside the standard insurer’s appetite, the process may take a little longer. This is typically due to the need for additional underwriting information or feedback from the insurer. We will keep you updated throughout and let you know what to expect based on your specific circumstances. If you require a quote more quickly, please advise, and we will try to accommodate you where possible. Contact us if you would like to request a quote or find out what information is needed.
What is a ‘Claims-Made’ Policy?
Last Updated: August 6, 2025A claims-made policy provides cover for claims that are made and reported while the policy is active. It does not matter when the work was done. What matters is when the claim is made and whether your policy is in force at that time. Even if the incident occurred years earlier, you must have a current policy in place when the claim is first notified in order to be covered. This is why maintaining continuous cover is important. If you retire, sell your business or stop trading, you may need run-off insurance to remain protected against claims relating to past work. Common types of insurance that are issued on a claims-made basis include: Professional Indemnity Management Liability Directors and Officers Insurance Cyber Insurance (depending on the insurer) Medical Malpractice Insurance These policies all respond based on when the claim is made, not when the event occurred. You can read more about how claims-made insurance works here. Contact us if you are unsure whether your policy is claims made or if you need help arranging continuous or run-off cover.
Is Professional Indemnity Insurance mandatory?
Last Updated: August 6, 2025Whether Professional Indemnity Insurance is mandatory depends on your industry and the nature of your work. In some professions, it is a legal or licensing requirement that can vary from state to state. This includes: Engineers and certifiers registered with state or national bodies Building Designers, Architects and Surveyors Financial advisers, mortgage brokers and insurance brokers Legal and accounting professionals In other industries, it may not be legally required but is often contractually required by clients, principals or project managers. You may need to hold a certain level of cover before starting work or receiving payment. Even when not mandatory, it is strongly recommended for anyone providing advice, design, certification or professional services. A claim can arise even if no mistake was made, and legal costs can be significant to defend. Contact us if you are unsure whether you are required to hold Professional Indemnity Insurance or want to confirm your current level of cover meets industry expectations.
I have an open Professional Indemnity claim against me – can you still assist?
Last Updated: August 6, 2025Yes. We may still be able to assist you even if you have an open claim under your Professional Indemnity policy. Every situation is different, so it is important to speak with us about the details of your claim. Understanding the background and current status allows us to give you tailored advice and explore your options. Placing cover with a new insurer can be more complex when a claim is ongoing, but it is not necessarily a barrier. Some insurers may request additional information or impose certain conditions, while others may be comfortable providing cover based on your circumstances. We will assess your situation, explain any limitations, and help you understand the best way forward to ensure your protection continues without unnecessary gaps. Contact us to discuss your current claim and how we can assist with ongoing or future coverage.
What limit of Professional Indemnity cover do I require?
Last Updated: August 6, 2025The right level of Professional Indemnity cover depends on your contracts, the nature of your work, and industry standards. In many cases, your required limit will be influenced by: The value and complexity of your projects Whether you work with government or commercial clients Any licensing or membership obligations Contract terms that specify minimum insurance requirements As a general guide, limits between $1,000,000 and $5,000,000 are common for smaller businesses or sole traders. Larger firms, or those working in higher-risk sectors, may require significantly more. If your profession has specific guidelines, we recommend reviewing your industry page for more tailored advice. Contact us to discuss your projects, contracts and exposures so we can help determine a cover limit that fits your business.
What is the difference between Professional Indemnity Insurance & Public Liability Insurance
Last Updated: June 19, 2025Professional Indemnity (PI) and Public Liability (PL) are both important insurance covers, but they protect you in different ways. Professional Indemnity Insurance covers claims that arise from the advice or services you provide, like an error in a report, a design flaw, or a breach of professional duty. This cover is essential for consultants, designers, engineers, and anyone offering professional expertise. Public Liability Insurance, on the other hand, covers injury or property damage caused by your business activities, like someone tripping over something in your office or damage caused to a client’s property during a site visit. In many cases, professionals will need both types of cover. Professional Indemnity protects your work, while Public Liability protects your day-to-day operations and activities.
What is Professional Indemnity Insurance
Last Updated: June 19, 2025Professional Indemnity Insurance (often called “PI”) is designed to protect professionals who provide advice or services to clients. If someone claims your advice caused them financial loss or harm, this cover can help with legal costs, investigation expenses, and even compensation payouts. It’s particularly important for consultants, designers, engineers, and other service-based businesses where mistakes, omissions, or breaches of duty can have a ripple effect. Even if the claim has no merit, you’ll still need to defend yourself, and that can be expensive. Most PI policies operate on a “claims made” basis, meaning the policy must be active when the claim is made, not when the work was done. Keeping continuous cover is critical. To obtain a quote or learn more about professional indemnity insurance, please get in touch with our team.