What Is Professional Indemnity Insurance? - Contractors Insurance Australia

June 3, 2015

Professional indemnity insurance is designed to protect professionals who provide advice to their clients. The protection is for the potential costs associated with legal claims that can arise from third parties. These legal claims can arise out of giving the incorrect advice, breaching your professional duty, or omitting information that would be vital to the service you provide for your clients in the course of your business.

If you are a professional providing advice it is recommended you take out professional indemnity insurance to protect yourself from bearing the full costs of a negligence claim against you. Professionals which should consider indemnity insurance include but are not limited to:

  • Accountants
  • Legal professionals
  • IT and web consultants
  • Marketing professionals
  • Stock brokers
  • Engineers
  • Consultants

In real-life this means if you give the wrong advice or do something negligent in the course of your job and your client suffers a financial loss as a result – they might take legal action against you. The professional indemnity insurance is in place to help defend your business against the claim and prevent financial loss.

Financial loss can not only mean the legal costs, but the payout if you lose the legal battle. It can cost a great deal of time and money to defend claims against malpractice, professional misconduct, breach of duty, or negligence. And you could also be found responsible for the actions of your partners, other directors, employees, or volunteers performing work for your business.

A professional indemnity insurance policy will safeguard your business so you can perform your job with confidence and know that if something does happen, you will have back up. Some professions even have guidelines or necessary levels of insurance that need to be met before proceeding with work. It is always best to check with the industry bodies to ensure you are correctly covered.

A good insurance broker will also be able to assist with advice regarding your professional indemnity insurance. If you need assistance with yours, contact Contractor Cover today and we will more than happy to help you.

General Advice Warning – retail clients *

General advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, please consider its appropriateness. You should also consider our disclosure documents, which include our Financial Services Guide (FSG) and Product Disclosure Statements (PDS) for some products.
*Retail clients are individuals or those purchasing an insurance product for use in connection with a small business where the product is a designated retail product (eg motor vehicle, home buildings, home contents, personal and domestic property, sickness and accidental and travel insurance). All other clients are wholesale clients.

We are a member of the Australian Financial Complaints Authority (AFCA). If you have a complaint and it is not resolved to your satisfaction by us, you have the right to refer the matter to the AFCA. The AFCA can be contacted at:

Mailing address
Australian Financial Complaints Authority, GPO Box 3, Melbourne, VIC 3001

Ph – 1800 931 678
Email – info@afca.org.au
Website – www.afca.org.au

Website By Cohesion Co.

Contractor Cover is a registered trading name of
Elliott Australia Group Pty Ltd
AFSL 418512
ABN: 81 153 685 922
© Contractor Cover – Insurance for Contractors in Australia