Many professionals forgo taking out Professional Indemnity Insurance (PI) because they think that they do not need it and that it is too expensive. They are wrong on both counts! If you provide a professional service or advice to clients, you need PI; the only question is how much you need.

The cost of the professional indemnity insurance that you carry needs to be commensurate with the amount of risk of a claim being laid against you by a third party. Such claims are made in the event of you or one of your staff members causing injury, damages or financial loss to a third party as a result of an error or negligence.

How Are PI Rates Determined?

Professional indemnity insurance rates are determined according to the choices that you make regarding the policy, the amount of cover you select, and various other factors:

Factors that will affect PI costs include:

  • The profession in which you practice
  • The amount of years that you have been practicing your profession
  • The annual turnover of the business
  • The location of your business
  • How many professionals are covered by the policy
  • The amount of risk of a claim
  • The potential severity of any claim that may be instituted against you
  • Any claims previously made against you or your business

Professional Indemnity Insurance Cost Examples

PI costs vary from state to state due to varying stamp duty rates and the minimum and maximum cover limits also differ between states.

These examples serve only to give you a broad idea of costs in Australia:


Professional indemnity insurance costs for accountants are calculated according to the number of professionals covered by the policy and annual turnover. Minimum PI costs for coverage of $1M for an accountant begin at about $752 inclusive.


Costs are determined by the number of professional staff covered under the policy and turnover. A bookkeeper can expect to pay a minimum of around $272 inclusive for PI cover of $250k.

IT Consultant

An IT consultant whose turnover is somewhere in the region of $220,000 per annum can expect to pay between $648 and $671 inclusive for Professional Indemnity cover of $1M.

Whilst the above will give you an idea of what you can expect to pay should you be in any of those professions, you would be wise to remember that these quotes are based on minimum cover.  Your profession or the size of your company may require you to take out more than $1M professional indemnity cover in order to be adequately covered.