What does PI insurance actually cover?

PI covers: claims of negligence, errors or omissions in your professional work, breach of professional duty, intellectual property infringement in your work, loss of documents, defamation (in some policies), and legal defence costs. It does NOT cover: intentional wrongdoing, criminal acts, or bodily injury (that's public liability).

Do I need PI insurance if I'm a contractor?

Almost certainly yes. Most clients require contractors to hold PI insurance before engaging them. Even without a contract requirement, as a contractor you're providing professional services — if those services cause your client a financial loss, you're personally liable.

Professional Indemnity Insurance Calculator

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Estimate professional indemnity insurance costs for Australian professionals. Protect against claims of negligence, errors, and bad advice.

Free to useNo data storedReal-time dataAI insightsUpdated: February 2026

Professional indemnity (PI) insurance protects you against claims of negligence, errors, omissions, or bad advice that cause your client financial loss. In Australia, PI insurance is mandatory for many professions (lawyers, financial advisers, real estate agents, engineers, architects) and increasingly required by clients in contracts. Even if not mandatory, a single claim without cover could bankrupt a small practice.

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Real-World Examples

IT Consultant, Solo

Solo IT consultant, $180,000 revenue, $2M cover, no claims.

Estimated premium: $800-$1,500/year. If a software implementation error causes a client $500,000 in lost revenue, the claim + legal defence could easily exceed $700,000. Without PI, that comes from your personal assets.

Small Accounting Firm

5-person accounting firm, $800,000 revenue, $5M cover, no claims.

Estimated premium: $4,000-$8,000/year. Mandatory for Tax Agents. A tax return error leading to ATO penalties and interest for a client could trigger a $200,000+ claim. PI is non-negotiable.

Frequently Asked Questions

Glossary

Professional Indemnity (PI)

Insurance covering claims of negligence, errors, or omissions in professional services that cause financial loss to clients.

Claims Made Policy

A policy that covers claims made during the policy period, regardless of when the work was done. Requires continuous cover without gaps.

Run-Off Cover

Extended PI cover after you stop practising, protecting against claims from past work. Typically needed for 7+ years.

Related Tools

Business Structure Advisor

Choose a structure that limits personal liability.

Business Loan Calculator

Finance PI insurance premiums.

How to Use

1Select your profession/industry.
2Enter your annual business revenue.
3Choose the cover limit you need.
4Add your number of employees.
5Indicate any claims history.
6See estimated premium range and recommended cover.

Key Information

PI insurance is mandatory for: lawyers, financial advisers (AFSL), accountants (Tax Agent), real estate agents, engineers (in some states), and architects.
PI insurance is 'claims made' — it covers claims MADE during the policy period, regardless of when the work was done (if retroactive cover is included).
After you stop trading or retire, you need 'run-off' cover for 7+ years — past clients can still claim.
Premiums typically range from $500-$5,000/year for small practices; $5,000-$50,000+ for larger firms.

Pro Tips

Check your registration body's minimum requirements — some mandate $2M+ cover.
Always include retroactive cover back to your first day of practice — claims can arise years after work was completed.
Many client contracts now require PI certificates before engaging you — losing a contract because you don't have cover is expensive.
Bundle PI with public liability and cyber liability for a comprehensive business insurance package.

Avoid These Mistakes

Thinking PI is the same as public liability — PI covers financial loss from bad advice/errors; public liability covers physical injury/property damage.
Letting the policy lapse — PI is 'claims made', so gaps in cover mean past work isn't protected.
Not getting enough cover — a $500,000 policy might not cover a single large claim including legal defence costs.
Not disclosing all services — if you expand into new services not listed on the policy, claims may be denied.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026