Professional Indemnity Insurance: Rules, Cost and PL vs PI

Professional indemnity (PI) insurance pays compensation and legal costs when a client claims your advice, design or professional service caused them a financial loss. It's compulsory for registered tax and BAS agents, financial advisers, credit licensees, solicitors, registered health practitioners, migration agents and several building and property roles, each with its own minimum. For everyone else, your clients and contracts usually decide whether you need it.

This is general information, not financial product advice, and it doesn't consider your circumstances. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for any policy, and consider advice from a licensed broker or adviser.

If you're working out the full set of covers a small business needs, start with our business insurance overview. This page goes deep on PI.

Which professions must hold PI insurance in Australia?

No single list exists, because each regulator sets its own rule. The table below brings together every mandatory PI requirement we could verify on the regulator's own page or the law it administers. If your role isn't here, that doesn't mean PI is optional for you; it means we couldn't confirm a rule, so check with your licensing body.

Rules checked 17 October 2026. Amounts can change, so confirm with your regulator before you buy or renew.

What the table doesn't cover

Some comparison and insurer pages say PI is mandatory or needed for "real estate agents", "architects" or "medical professionals" without naming a rule. We've listed only what a regulator confirms. Engineers Australia says PI "can be a requirement for registration" in certain jurisdictions without naming them, so engineers outside the NSW and Victorian schemes above should ask their registration body. We also didn't verify the solicitors' schemes in WA, Tasmania, the ACT or the NT, or every Ahpra Board's dollar figure.

When PI is effectively required

Plenty of roles have no PI law but can't work without it:

• Client contracts. A contract can set a minimum limit and require you to keep cover for a period after the job ends.
• Professional associations. NRMA notes that some associations require a minimum, giving $1 million as an example, before you can join.
• Professional standards schemes. Members of an approved scheme have their liability capped, and the scheme must make sure they can meet damages up to that cap. Your association's scheme documents set the insurance level.
• Your own assets. As a sole trader you have unlimited personal liability, so an uninsured claim can reach your house and savings. Our guide to sole trader insurance covers the full picture.

Worked example: TPB tiers and the excess cap (illustrative)

Mia is a sole-trader BAS agent. Last year her turnover was $68,000 excluding GST.

• Tier: up to $75,000, so her minimum aggregate cover is $250,000.
• Excess cap: 4% × $68,000 = $2,720. That's above $1,000, so her excess must not exceed $2,720.

Next year her turnover reaches $90,000. She moves to the $75,001 to $500,000 tier, so her minimum becomes $500,000, and her excess cap rises to 4% × $90,000 = $3,600.

A new agent turning over $18,000 works it out the same way: 4% × $18,000 = $720, which is less than $1,000, so the excess can't exceed $1,000.

ASIC's AFS rule scales the same way. A licensee with $3.4 million of revenue from retail clients needs cover of roughly $3.4 million, with defence costs on top. If you're choosing a bookkeeper or BAS agent, ask to see their certificate of currency; our guide to checking a BAS agent's registration shows where the TPB register helps.

Dates to watch in 2026 and 2027

How PI insurance works: claims made, retroactive dates and run-off

PI policies work differently from most business insurance, and the difference catches people out at the worst possible moment.

Claims made

PI is written on a claims-made basis. The policy that pays is the one in force when the claim is first made against you and reported to the insurer, not the one in force when you did the work. BizCover's PI page puts it plainly: claims are only covered if notified while the policy is active.

That has a useful side. Many policies let you report circumstances that might lead to a claim, such as an angry client email, during the policy period. LPLC's scheme for Victorian lawyers, for example, covers claims made after the period if the circumstances were first notified during it. Check your policy wording for the equivalent clause, and report early.

Retroactive date

The retroactive date is the earliest date of work your policy covers. A claim about work done before it isn't covered, even if the claim arrives today. The TPB and ASIC both require renewed policies to cover back to the earlier of the retroactive date in your current policy or the start of your first policy in an unbroken series. Some insurers offer unlimited retroactive cover, which reaches all prior work.

Continuous cover and known circumstances

New policies don't cover things you already knew about. NRMA's wording is typical: no cover for claims or circumstances you know about before the policy starts. So if you switch insurers after a client has complained, the old insurer may say the claim came too late and the new one may say you already knew. Report the complaint to your current insurer before the policy ends, then switch.

Run-off cover

Run-off cover protects you against claims made after you stop practising, for work you did while operating. Without it, closing the business and cancelling the policy leaves every past job uninsured. The rules vary:

• ASIC expects credit licensees to seek at least 12 months of automatic run-off where it's reasonably available. AFS licensees aren't required to hold it because ASIC says automatic run-off isn't available in the market.
• NSW conveyancers' approved policies must provide run-off for former licensees.
• Victorian lawyers who retire are covered by LPLC's run-off policy.
• Privately practising midwives leaving private practice must have run-off.
• NSW recommends run-off for certifiers, who can be liable for up to 10 years after their work.

What PI covers and what it excludes

PI responds to allegations that you didn't meet the standard expected of a professional. Policy terms differ, so treat this as a map of what to look for, then read the PDS.

Three illustrative scenarios show where the line sits:

• A bookkeeper codes GST wrongly for a year and the client's ATO debt grows. The client claims the extra penalties and interest. That's a PI claim.
• A web developer builds a checkout that leaks customer card data, and the client sues for its losses. NRMA gives an insecure checkout as a PI example; a cyber policy may also respond for the client's own breach costs.
• A physiotherapist's client trips on a mat in the clinic waiting room. That's public liability, not PI.

How much does professional indemnity insurance cost?

The most detailed public figures come from BizCover, an online intermediary that publishes averages from its own customers. They're a guide to the range, not a quote.

Average monthly premium by industry, BizCover customers, 1 July 2024 to 30 June 2025 (checked 17 October 2026):

Business size matters too. BizCover customers with no employees paid an average of $83 a month; with three employees, $147; with five, $189 (same 2024-25 data, checked 17 October 2026).

Starting prices for consultants, from quotes on BizCover's platform in December 2025, for sole traders with revenue up to $50,000, $5 million of cover and a $500 excess, including platform and card fees (checked 17 October 2026):

Finder ran quotes in February 2025 for a sole-trader tax agent with $150,000 of revenue. Its averages across six insurers were $667 for $250,000 of cover, $719.27 for $500,000 and $843.18 for $1 million, with excesses from $0 to $2,500 (checked 17 October 2026). Finder doesn't label the period; if the figures are annual, they sit close to BizCover's $62 a month (about $744 a year) for accounting and bookkeeping.

What pushes your premium up or down

• Occupation. Insurers price on the claims history of your profession, which is why engineers pay several times what bookkeepers do.
• Turnover and staff. More work and more people mean more chances of a mistake.
• Limit and excess. A higher limit costs more, though BizCover notes that doubling cover from $1 million to $2 million doesn't double the premium. A higher excess lowers the premium but must be affordable (and within any regulator cap).
• Claims and complaints history. Prior claims raise premiums and can narrow cover.
• Contract mix. Large projects, overseas clients or high-risk work (such as cladding or financial product advice) attract loadings or exclusions.
• Location. State and territory stamp duty on insurance premiums ranges from 0% to 11%, according to BizCover.
• Retroactive date and run-off. Unlimited retroactive cover and run-off periods add cost.

Premiums are generally a deductible business expense; the ATO lists professional indemnity among a business's operating expenses. For what else you can claim, see small business tax deductions. Factor the premium into your charge-out rate using our guide to calculating your hourly rate.

Contractors and freelancers: when a client contract demands PI

Consultants, IT contractors, designers and marketers often meet PI for the first time in a client's contract. Before you sign, check:

1. The limit and how it's expressed. "$2 million any one claim" isn't the same as "$2 million in the aggregate". Ask whether the policy has an automatic reinstatement if one claim uses up the limit.
2. How long you must keep cover. Contracts often require cover for several years after the work ends, which is a run-off requirement in disguise.
3. Certificate of currency. You'll need to supply one before work starts and at each renewal. The name on it must match the contracting party.
4. Indemnity and liability clauses. A clause where you accept liability beyond what the law imposes may sit outside your PI cover. NSW's guidance for certifiers warns that signing a contract that waives proportionate liability might void the insurance for that project. Show onerous clauses to your insurer or broker first, and read our guide to unfair contract terms.
5. Notice obligations. Some contracts require you to tell the client if your policy is cancelled or reduced.

If you're setting up as a consultant, our consulting business guide covers the rest of the set-up, and business contracts explained covers the agreements themselves. If the client treats you like staff, read employee vs contractor too.

Public liability vs professional indemnity

Average costs checked 17 October 2026.

Most people who give advice and also deal with the public need both. A personal trainer advises on programs and runs sessions in a park. An IT consultant advises on systems and installs hardware in a client's office. An allied health practitioner treats patients in a clinic. Each could face either type of claim. For the other side of the comparison, read our public liability insurance guide and what public liability costs.

How much cover do you need? Choosing a limit

Work through these in order:

1. Legal minimum. If your profession is in the table, that's the floor, not the target. The TPB says outright that an appropriate amount may be more than its minimum.
2. Contract and association minimums. Take the highest limit any client, tender or association will ask for in the next 12 months.
3. Your largest plausible loss. What's the biggest financial loss one mistake could cause a client? Think of the value of the transactions, projects or tax positions you touch.
4. Number of claims. If one error could affect many clients at once, such as a template, a software setting or a batch of returns, an aggregate limit can run out fast. Ask about reinstatement.
5. Defence costs. Costs can be inside the limit or on top of it. ASIC requires them on top for AFS licensees; on an inclusive policy, legal fees eat into what's left for the claimant.
6. Scheme caps. If your association runs a professional standards scheme, your cover must support the scheme's liability cap.
7. Excess you can pay. Use the TPB's 4%-of-turnover cap as a sanity check even if it doesn't bind you.
8. Time horizon. If clients can sue years later, budget for run-off when you plan your exit.

For a broader look at protecting the business when things go wrong, see our guide to setting a cash buffer from your actual risks.

Checklist before you buy or renew

• Check the table above and your regulator's page for a mandatory minimum and policy terms.
• Describe every service you provide, accurately. A policy written for "bookkeeping" may not respond to payroll advice or tax planning.
• Confirm the limit, whether it's per claim or aggregate, and whether defence costs are inside or on top.
• Confirm the retroactive date matches your first continuous policy.
• Disclose every complaint, demand or mistake you know about, and notify your current insurer before switching.
• Check that contractors and subcontractors are covered, or that they hold their own policy (the TPB requires one or the other).
• Read the exclusions in the PDS, especially contractual liability, overseas work and any industry-specific exclusions.
• Check the insurer is authorised to write insurance in Australia (the TPB's rule for tax practitioners is a good standard).
• Send your certificate of currency to your regulator and clients after each renewal.
• Diary the renewal date, and plan run-off before you close, retire or sell.

Key takeaways

• PI is mandatory for registered tax and BAS agents ($250,000 to $1 million by turnover), AFS and credit licensees ($2 million minimum), migration agents ($250,000) and several legal, property, health and building roles.
• PI is claims made: the policy in force when the claim is made responds, so a lapse or cancellation can leave years of past work uninsured.
• Keep your retroactive date when you switch insurers, report complaints before the policy ends, and arrange run-off before you retire, close or sell.
• Published averages run from $62 a month for accounting and bookkeeping to $210 for architecture and engineering (BizCover 2024-25 data, checked 17 October 2026).
• Public liability covers injury and property damage; PI covers financial loss caused by advice or professional work. Many service businesses need both.

Where to get help

• Your regulator or licensing body: the Tax Practitioners Board, ASIC, Ahpra, your state law society, Fair Trading or Consumer Affairs office, the QBCC or your state building regulator.
• Professional Standards Councils: explains how capped-liability schemes work and which associations run them (psc.gov.au).
• business.gov.au: plain-English overview of insurance types, including PI (types of business insurance).
• Moneysmart and ASIC's professional registers: check an insurance broker's licence before you deal with them.
• Australian Financial Complaints Authority (AFCA): free dispute resolution if an insurer refuses a claim you believe is covered (afca.org.au).
• A licensed insurance broker: for unusual work, high limits, run-off or contract wording.

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