Thank you for subscribing

You’ll be sent the latest news, exclusive offers and competitions to your inbox.

What is Professional Indemnity Insurance and who might need it?

Professional man and woman working together at desk with laptop
RACV

May 16, 2025

Professional Indemnity Insurance is designed to help protect businesses or individuals that offer professional advice or services. Here is a guide to who needs this type of insurance, what’s typically covered and common key exclusions.

Professional Indemnity Insurance is designed for businesses or individuals offering professional services or advice. It can cover legal costs, damages, and investigation fees if a client claims financial loss due to mistakes, such as breach of duty, privacy violations, intellectual property infringement, or defamation. Additional benefits include reputation repair and claims investigation costs.

Each insurance policy is different, so always read the policy wording from the insurer for specific details. This article answers some commonly asked questions about Professional Indemnity Insurance.

More small business insurance articles


Man walking down Melbourne street talking on phone

Professional Indemnity Insurance helps protect professionals from claims made against them for financial losses. Image: Getty

What is Professional Indemnity Insurance?

Professional Indemnity Insurance helps protect businesses and professionals from claims made against them for financial losses caused by errors, omissions, negligence, or breach of professional duty in the services they provide.

Who might need Professional Indemnity Insurance?

Professional Indemnity Insurance is designed for businesses or individuals that offer professional advice or services, such as consultants, accountants, architects, and engineers. If your business provides expertise or advice, clients can sue for mistakes or failures, and this insurance can help cover the costs associated with those claims.

What does Professional Indemnity Insurance cover?

It depends on the policy and provider, but Professional Indemnity Insurance typically covers things like legal costs, damages, and expenses resulting from claims of negligence, errors, omissions, or breach of duty, as well as claims related to intellectual property infringement, defamation, or privacy violations.

What is not covered under Professional Indemnity Insurance?

This depends on the policy and the provider, but it typically excludes claims resulting from intentional wrongdoing, fraud, or criminal activity. It may also not cover claims arising from issues or complaints before the policy started.

This is a summary only – terms, conditions and policy limits apply. For full details of what is and is not covered, please read the policy wording. For example, this is the relevant document for an RACV Professional Indemnity Insurance Policy.

Woman working on computer while consulting female client

In some industries, Professional Indemnity Insurance can be a regulatory requirement. Image: Getty

Is Professional Indemnity Insurance required by law?

In some industries, Professional Indemnity Insurance can be a regulatory requirement. However businesses providing professional services to clients may find cover offers important protection regardless of whether it is a regulatory requirement.

How much does Professional Indemnity Insurance cost?

The cost varies based on factors like the size of your business, the industry you're in, the coverage amount, and the claims history. Costs can also vary depending on your provider. Premiums can range from a few hundred to several thousand dollars per year.

Can I add other types of insurance?

Yes, many providers offer options to bundle Professional Indemnity Insurance with other types, such as public liability insurance, to create a comprehensive business insurance package.

For example, with RACV Professional Indemnity Insurance, you may also be able to add RACV Public Liability Insurance to protect against negligence claims. Coverage can be customised based on your business size and risk level, with options for up to $20 million in coverage. Key exclusions include intentional damage, known circumstances, and bankruptcy.

There is also RACV Business Insurance, which caters for small businesses with fewer than 20 employees and under $5 million in revenue.

This is a summary only – terms, conditions and policy limits apply. For full details of what is and is not covered, please read the policy wording in the Product Disclosure Statements (PDS) and Policy Documents.

close-up of man's hands on laptop keyboard

When you receive policy documents, read them carefully to make sure the policy suits your needs. Image: Getty

What types of service providers tend to consider professional indemnity insurance?

Every business is different. Here are some of the types of people or businesses that typically consider this type of insurance:

Consultants: Business consultants, management consultants, and IT consultants who provide advice and recommendations for other businesses.

IT professionals and software developers: IT consultants, software developers, systems analysts, and cybersecurity experts who provide technology services or advice.

Educators and trainers: Tutors, trainers, and educational consultants who offer teaching, training, or educational services.

Media professionals: Journalists, bloggers, public relations consultants, and content creators who produce media or marketing content for clients.

Designers and creative professionals: Graphic designers, interior designers, branding consultants, and advertising professionals who provide creative services to clients.

Surveyors: Land surveyors, building surveyors, and quantity surveyors who offer professional surveying services.

Marketing professionals: Marketing consultants, digital marketers, SEO specialists, and social media consultants who provide marketing strategies or services to businesses.

Public Relations Professionals: PR consultants and communication professionals who manage a company’s public image or media relations.

Event managers and wedding planners: Event planners, wedding planners, and coordinators who organise or manage events for clients.

Recruiters and HR consultants: Recruitment agencies, human resources consultants, and employment advisors who provide talent acquisition and workplace management services.

Travel agents: Travel consultants and agents who provide advice or arrange travel plans for clients.


Find out how to protect your business before things go wrong

Discover RACV Business Insurance

The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As a referrer, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product (s) issued by Insurance Australia Ltd, ABN 11 000 016 722, AFS Licence No. 227681.