Smart Business Insurance
Level 11, 484 St Kilda Road Melbourne, VIC3004
$ Phone: 1300 542 573 info@smartinsure.com.au

1300 542 573

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How much will Professional indemnity insurance cost?

The cost of professional indemnity insurance for your business activities depends on a number of key factors including:

  • The nature and scope of your business advice
  • Your business turnover and size
  • The size of the clients that you provide advice to
  • Amount of insurance cover your business needs

Business Scope and Professional Indemnity Insurance

Generally the riskier the advice your business provides, or the higher the stakes for the recipient, the higher the cost of your premium will be.

For example, the outcomes from professionals providing investment, legal, medical or business advice such as financial planners, lawyers, doctors or commercial accountants present a relatively high financial risk or health risk to the recipient and may receive relatively high professional indemnity premiums.

On the other hand the advice from professionals such graphic designers, interior designers and bookkeepers typically present lower financial and health risks to recipients and may receive relatively low professional indemnity premiums.

Business Size and Turnover

However, as they say, SIZE does matter.

So, for example, a marketing and advertising business with 12 people will typically receive a larger professional indemnity policy cost than a sole trader in the same industry or an agency with a couple of staff.

Similarly, typically where a business is providing professional advice to large companies, governments or schools professional indemnity cost may be higher than when advice is provided to individual or smaller companies.

  • There are a number of exceptions to the rule. Medical advice is an example of advice to individual where professional indemnity costs are high. The stakes are high.
  • Another example of where advice is often provided to individuals yet the cost of professional indemnity insurance is high applies to financial planners; as the insurance companies know from experience that the financial stakes can be high.

Professional Indemnity level of cover

Typically professional indemnity cover for small and medium businesses is available in either $1million, $2million, $5million, $10million and $20 million.

  • Important considerations when determining what professional indemnity level to cover you need: The nature of the business advice , and the size of business, often determine the amount of cover ($) your business will need.
  • The general rule of thumb is the greater the potential damages from the advice provided and/or the larger the business, the larger ($) sum insured.
  • What is the worst thing that could happen from the advice you give ,or don't give , and what are the maximum damages that could be claimed for if clients suffered financial or health losses as a result of your advice . Be generous .
  • How many client facing staff do you have providing advice? How experienced are they? Is staff turnover high?
  • Are you providing important advice to large companies, Government departments, councils, schools ?
  • Are you operating in a high risk advice industry such ad financial services, medical, aviation ?

Important considerations when determining what professional indemnity level to cover:

  1. What is the worst thing that could happen from the advice you give ,or don't give , and what are the maximum damages that could be claimed for if clients suffered financial or health losses as a result of your advice . Be generous .
  2. How many client facing staff do you have providing advice? How experienced are they?; is staff turnover high? ,
  3. Are you providing important advice to large companies, Government departments, councils, schools ?
  4. Are you operating in a high risk advice industry such ad financial services, medical, aviation ?
  5. Some councils and government departments are already insisting on a minimum $20,000,000 limit.

If your business activities include working in the above locations you will need a minimum of $10,000,000 million public liability cover or even $20,000,000.

How much will Professional indemnity insurance cost?

So, how much will professional indemnity insurance cost you?

Whether you are a self-employed consultant or a professional advisory firm if you think you are not covered suitably or are paying too much for professional indemnity insurance the team at SMART may be able help. Call us on 1300 542 573 or email enquiry@smartinsure.com.au and we'll obtain a suitable quote for you.

Professional indemnity Insurance cost for sole traders, and consultants and start from $380.

Some examples of pi costs are below:

  • Professional indemnity cost for some sole trader consultants providing low risk advice : from $350
  • Professional indemnity cost for I.T. consultant: from $600
  • Professional indemnity cost for environmental consultant: from $800

Please note: While cheap Professional indemnity Insurance can seem attractive on the surface it is important to ensure the policy covers you for the business activities you undertake and the insurance policy and company will respond as intended when there is a claim.

Call us on 1300 542 573 or email enquiry@smartinsure.com.au and we'll obtain a suitable professional indemnity quote on your behalf.

To discuss your Professional Indemnity exposures and to get a competitive quote on a suitable Professional Indemnity policy call a SMART Business Insurance broker on 1300 542 573 or email enquiry@smartinsure.com.au.

1300 542 573

TALK to a SMART Business Insurance adviser

Business Hours:

Monday – Friday 8.45 am - 6.00 pm AEST

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