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What Does Professional Indemnity Insurance Cover?

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Professional indemnity (PI) insurance is an important cover for any business providing professional services or advice. If you are a professional who is being sought for advice or skilled work, then a professional indemnity insurance policy is relevant to you. The possibility of claims for negligence and breach of duty is a very real exposure for any professional.

Professional Indemnity Insurance: What is it?

Professional Indemnity Insurance covers against claims made by a third party for breach of a civil law, tort, or contract breach. Having a PI insurance policy in place may protect your business against financial loss and subsequent damages that arise from an act, error, or omission in the professional services you provide.

For example, misrepresentation in an advertising campaign, or incorrect assessment of the effects of toxic chemicals creating environmental issues can all result in financial loss, damages and/or injury to the client. These may result in a potential claim and a compensation requirement.

What may be covered by professional indemnity insurance?

Professional indemnity insurance may cover legal fees incurred to defend or settle a claim, settlements, compensation costs, and other losses provided that they are stated or covered by the policy you have arranged.

These are some of risks PI insurance may cover.

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Limitations to Professional Indemnity Insurance

Of course, an insurance policy isn’t be able to cover all the possible risks that a business will face. PI insurance may not be able to cover the following:

To find out more information about “What Exclusions do Professional Indemnity Policies have?” please refer to our recent blog.

For claims arising from circumstances unrelated to professional services, you may need other types of business insurance cover like public liability insurance. As a business professional, take into account the possible risks and have the suitable cover for them. There is a wide range of insurance products available that are needed for businesses like yours. FD Beck can assist you with arranging the type of insurance you would need for possible claims.

Who needs professional indemnity insurance?

  • Professional Indemnity insurance in Australia is sometimes a mandatory requirement for professionals. Even if it is not mandatory in your particular profession, your clients may require it prior to signing a contract with them.

Business owners, freelancers and even the self-employed who provide advice or professional services need PI Insurance. Architects, engineers, bookkeepers and accountants, consultants, marketing specialists, anyone in public relations are some professionals who may need PI policy.

Some hands-on professionals may also need PI Insurance, like publicity consultants, agricultural consultants and event managers. For further information on “Who needs Professional Indemnity Insurance “we suggest you read our recent blog.

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Why is Professional Indemnity Insurance Important?

The chances of a claim occurring against your professional services are possible in whatever industry you work in. No matter how good or meticulous you are in your job, you can be held accountable for the services and advice you provide. If you provide insufficient and incorrect advice you may be liable to pay for damages and losses subsequent to providing your service.

Professional Indemnity Insurance protects your reputation and helps shoulder the financial burdens like legal costs and compensation costs for damages. It protects you from future claims as you operate confidently and with peace of mind.

Arranging a Professional Indemnity Insurance with FD Beck

FD Beck has access to a wide network of insurers in Australia who can cater to different industries and professionals. We can provide you with insights and recommendations as to which insurance products are suitable for your business. We can start with a careful assessment of your needs and requirements to create a suitable PI Insurance policy that fits your specific industry.

You may also use our online calculator to request insurance quotes



You need to take into consideration your circumstances. This would include:

For more detailed answers to this question please refer to FD Beck’s blog “How much professional indemnity does a consultant need” . 


Legal costs for claims arising from the breach of duty or omission in the performance of duty can be high because of the possible complexities that arise from the case and can often last to a year or more if you are held liable. In fact, sometimes we see claims where the legal defence costs are just as much as the amount of compensation being claimed by the third party.

In the event of a claim PI cover gives you access to some of Australia’s top legal firms. Insurance companies have a panel of legal firms which they use and that are selected for their expertise in handling PI matters.


PI Insurance covers losses arising from you providing professional services or advice to a client. On the other hand, the trigger for a claim under Public Liability insurance is different. Put simply, the trigger for a claim is a demand for compensation as a result of either third party property damage or personal injury. For a more detailed answer to this question we recommend reading our blog “What is the difference between Professional Indemnity and Public Liability Insurance?


Yes. Just answer a few questions in our quotes calculator to generate a free quote online.

Simon Pascoe Updated Rectangle | FD Beck Insurance Broker 300x300

Simon Pascoe

For the past 27 years Simon has enjoyed a career in the Insurance industry as both a broker and underwriter. Prior to being a director at FD Beck Simon had a successful 8‐year management career with one of the worlds largest general insurers, which saw him deal with and structure insurance programs for some of Australia’s largest insurance purchasers.

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