How Much Does Professional Indemnity Insurance Cost?

What is professional indemnity insurance? 

If you provide professional advice or services, like financial advice or architectural designs, professional indemnity insurance could help cover costs for claims arising from errors, omissions, negligence or breaches of duty. This may include legal costs and any court awards you need to pay. Depending on your industry, you may even need professional indemnity insurance to legally operate.  

How much can I expect to pay for professional indemnity insurance? 

There’s no one set amount a professional indemnity insurance premium can be. However, it’s always nice to have a ballpark figure to help get your ducks in a row.  

With that in mind, in FY24, the average annual industry premium for those providing legal and accounting services was $55 per month.^ 

Depending on your own individual risk profile, you may find that your premium is higher or lower than the numbers above. 

What affects the cost of professional indemnity insurance? 

Market conditions and your risk profile can mean your professional indemnity insurance premium changes from year to year, as well as between insurers. Higher risk (e.g. how likely you are to claim) could mean a higher premium. Different insurers could weigh up risks differently but they may look at factors like: 

A higher revenue and a higher number of employees could indicate to your insurer that you’re getting a lot of work, which also means the chances for something to go wrong go up. 

Helpful tip

With many professions requiring professional indemnity insurance and other business insurance policies, some insurance providers offer packages of multiple policies bundled together to help keep things simple. BizCover’s business insurance package for example, combines policies such as content, theft, building, business interruption and more.

Sharon Kenny

Head of Marketing and Partnerships – Bizcover

How much professional indemnity cover might I need? 

Everyone’s cover needs will be different, but you might like to take a few things into consideration to help you decide what cover you’d like.  

For instance, the area you work in, including the value of typical projects or services, and the customers you work with may be a good place to start. You might like to think about the risks involved and what the cost could be if something were to go wrong. Your professional experience or previous claims history, including claims made against you, may help you fill in the blanks here. 

Additionally, if you’re a member of an industry body, you may need a certain level of cover to obtain and maintain membership. To be a Certified Practising Accountant (CPA) in Australia, for example, you need to have sum insured cover of at least two million dollars.¹CPA Australia – CPA Australia Professional Indemnity Insurance: Comparison checklist, p1

How could I reduce my premium without changing my cover? 

Underinsurance is a real risk when trying to adjust your premium. However, you may not necessarily need to change your cover to see your premium go down. You may like to try: 

Putting in risk mitigation strategies

Being proactive to lower risk, including regularly auditing your work, could help reduce the likelihood you need to make a claim and thereby drop your premium.

Raising your excess

As with many insurance policies, a higher excess may mean a lower premium.

Reviewing your policy regularly

Getting into the habit of reviewing your policy could help you check the level of cover is what you want, along with keeping your insurer aware of whether your risk level is going up or down. 

As you review your policy, you may even like to take a peek at what else is around. You could find a policy that offers the same level of cover (or greater) for a different premium. 

Where can I find and compare professional indemnity insurance? 

Whether it’s mandatory or just seems like a good idea, iSelect and Bizcover make it easy to compare a range of Professional Indemnity insurance from different providers. You can even compare online right now.

^ Average Premium is based on FY24 and presented as a guide only. It may not reflect pricing for your particular business, as individual underwriting criteria will apply. This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.