indemnity insurance

  1. Professional indemnity Insurance explained
  2. Defining Professional Indemnity Insurance
  3. Why is Professional Indemnity Insurance Important?
  4. Who Needs Professional Indemnity Insurance?
  5. The Cost of Litigation
  6. Protecting Your Professional Reputation
  7. Final Word
  8. Professional Indemnity & Malpractice Insurance | QBE Singapore
  9. Professional Indemnity Insurance
  10. Medical Malpractice Insurance
  11. Directors & Officers Liability Insurance
  12. Association Liability Insurance
  13. Professional Indemnity Insurance | Compare Quotes | iSelect
  14. What is Professional Indemnity insurance?
  15. Why would you consider taking out a policy?
  16. How can Professional Indemnity insurance protect my business?
  17. What is the potential risk of not having Professional Indemnity insurance?
  18. Is Professional Indemnity insurance compulsory?
  19. What businesses could Professional Indemnity insurance be relevant for?
  20. What’s typically excluded in a standard policy?
  21. What’s the difference between Professional Indemnity and Public Liability insurance?
  22. How much can Professional Indemnity insurance cost?
  23. How do I choose a Professional Indemnity insurance policy?
  24. Home indemnity insurance
  25. What is home indemnity insurance?
  26. Is all residential building work over ,000 required to have HII?
  27. Who is responsible for obtaining HII?
  28. How should builders inform owners about HII?
  29. Who provides HII and who chooses the insurer?
  30. What if the builder cannot obtain HII or fails to take it out?
  31. Does HII cover reduce a builder’s liability?
  32. Does HII apply to everyone who builds?
  33. Owner-builder requirements
  34. Builder’s principal place of residence requirements
  35. Further information

Professional indemnity Insurance explained

indemnity insurance

Professional Indemnity Insurance is an important type of cover for a business, however it is particularly relevant to those in professions which provide advice for a living.

A professional can be anyone who «provides advice or services of a skillful character according to an established discipline».

A claim for compensation as a result of incorrect professional advice or services, whether your business is big or small, can set back your business severely.

Defining Professional Indemnity Insurance

Professional Indemnity Insurance covers against claims for liabilities owed to a third party (typically a client of the insured) for the loss suffered by the third party arising the insured providing ‘professional services’.

To ‘indemnify’ means to cover the insured for the liability owed to the third party for the loss suffered.

Professional Indemnity Insurance therefore is a type of insurance which can protect your business, for example against claims for financial loss, or bodily/personal injury and/or property damage that arise from an act, error or omission in the performance of the professional services covered by the policy.

For example incorrect designs made by an architect, incorrect advice provided by a migration agent with respect to visa requirements, failure to detect unsafe work conditions by a work, health & safety consultant can all result in a financial loss or bodily injury to a client, and therefore result in a potential claim for compensation against the insured.

Why is Professional Indemnity Insurance Important?

On occasion it’s possible in your profession to unintentionally breach privacy or confidentiality, omit information, make an error of judgement or provide the wrong advice. A simple act, error or omission can lead to a claim against your business, therefore making it vital to protect yourself, your business, and reputation.

Professional Indemnity Insurance is important as the legal costs associated with defending any claims can be significant.

Court and other legal fees to defend your business are often underestimated, and small businesses in particular can struggle to find the money to pay for this, regardless if they are found liable or not for damages.

Court cases can also drag on for extended periods of time, with ongoing fees over years which can have a significant financial impact on your business.

Professional Indemnity Insurance is important as it can protect you from bearing the full cost of these claims. This can allow you to keep your business up and running as normal, without too many disruptions to your normal operations.

Who Needs Professional Indemnity Insurance?

Professionals such as lawyers, accountants, bookkeepers, architects, engineers and marketing specialists are a few of the professions where Indemnity Insurance can apply.

Professions that have more hands-on jobs are less ly to need Professional Indemnity Insurance, however it can still apply in some cases.

For example, agricultural consultants, event managers, life coaches and marriage celebrants.

Whatever industry you work in, as a Professional in that industry, you hold the responsibility that your advice or services is of quality. Therefore if you provide advice or services to your client which are incorrect, you could potentially be liable to pay for losses occurring as a result of this.

The Cost of Litigation

Many businesses underestimate the real cost of legal action. The cost for a defence could be around the $100,000 mark — or much more. Many businesses – especially small businesses – would struggle to fund these costs.

For example, a case handled by CGU saw a professional involved in a lawsuit that extended to $1 million in legal fees alone over several years.

His insurance premium covered all associated costs and the case was handled by the company. More importantly, he was proven not to have been negligent.

Protecting Your Professional Reputation

This illustrates an important factor in professional indemnity – the often overlooked issue of reputation defence.

There can be a tendency in such legal cases for the professional involved to try to settle the case as quickly as possible. While it may seem the easiest solution, it’s important to consider the long-term impact of this course of action. It can be seen as an admission of guilt and have a devastating effect on your reputation.

Professional indemnity insurance enables you to pursue legal avenues to clear your name and defend your reputation – with the backing of a legal and insurance team.

When advice is your livelihood, the right professional indemnity cover can offer peace of mind, security and most importantly, protect your valuable reputation.

Final Word

Regardless of your profession or the size of your business, Professional Indemnity Insurance provides businesses with the peace of mind to keep working confidently. You can find some more information about Indemnity Insurance on our website here.

Protect your professional reputation, your business and your livelihood with the right cover. For more information regarding Professional Indemnity Insurance, contact CGU today.


Professional Indemnity & Malpractice Insurance | QBE Singapore

indemnity insurance

In an environment of increased responsibility and accountability, Professional Liability insurance is an essential component of risk management for businesses providing professional services.

It can provide you, your company and your executives with cover against legal liability in connection to your services rendered, the threat of litigation and any potential damage or settlements.

It allows you to operate confidently and securely, with the knowledge that your professional liability exposures are covered.

QBE Professional Liability Insurance provides risk management solutions for businesses and professionals across a broad range of industries.

Professional Indemnity Insurance helps protect professionals against legal liability for breach of professional duty in the conduct of their professional business practice.

Medical Malpractice Insurance helps protect medical professionals against legal liability arising from malpractice that leads to bodily injury, sickness, illness, mental injury, or death of patients.

Information and Communication Technology Insurance helps protect IT professionals against legal liability for claims in connection with the provision of information and communication technology services.

Directors and Officers Liability Insurance helps protect company directors and officers for their personal legal liability for their wrongful acts committed in their capacity as company directors or officers.

Association Liability Insurance helps protect not-for-profit organisations against legal liability arising from professional services provided, as well as the management committee and employees for their management liability.

Commercial Crime Insurance provides coverage to companies against money, stock, goods, securities, property or funds stolen by employees or third parties.
It also protects against the theft of clients’ money or property for which you are responsible.

Professional Indemnity Insurance

Any professional person or consultant providing advice or other services is exposed to claims. If a party suffers loss after relying on the advice of a professional, they may have the right to sue for their losses.

Professionals require cover to help protect them against the potential financial burden of such litigation and to help protect the reputation of their practice, their personal integrity and their assets. Cover for legal costs and expenses is important as litigation involving professionals is often complex.

It is imperative that professionals have access to specialist and quality legal representation to safeguard their interests in the most effective way.

The QBE Professional Indemnity Insurance Policy is the solution to provide professionals with the confidence to face the challenges of business.

Should they be faced with litigation or prosecution, they can be assured that QBE can help protect and support them. Major categories of professions covered include but are not limited to:

  • Accountants
  • Lawyers
  • Architects, Engineers and other Construction-related Professionals
  • Financial Advisers
  • Management / Business Consultants
  • Human Resource Consultants

How to obtain a quote? – Please provide us with the completed proposal form.

Medical Malpractice Insurance

The advancement in medicine in recent decades has brought new knowledge and treatment methods. On the other hand, medical risks have also increased significantly.

If a patient suffers bodily injury, sickness, illness, mental injury or even death after relying on the advice or service of the medical professional or establishment, they or their legal representatives may have the right to sue for the loss.

Medical malpractice insurance covers medical professionals and establishments for negligent acts, errors or omissions arising from the rendering or failure to render medical services.

How to obtain a quote? – Please provide us with the completed proposal form.

If an IT professional designs and installs software or hardware that subsequently fails to meet expectations, is it a design error or installation error? Under separate professional indemnity and product liability policies, there may be a lengthy debate as to which policy will respond.

To deal with this issue, the QBE Information & Communication Technology insurance policy combines attributes of professional indemnity, product liability and public liability into a single policy.

This removes the potential debate whether the product should be defined as a service or a good because under the policy, it will respond to both, providing the IT professional with comprehensive coverage.

How to obtain a quote? – Please provide us with the completed proposal form.

  • Brochure
  • Proposal Form
  • Proposal Form (SME)
  • Case Studies

For ICT whitepaper:

Click here

Directors & Officers Liability Insurance

Duties are placed upon leaders of companies by statues and acts and by common law.

Today, with increased emphasis placed on corporate governance, directors and officers of companies are facing heavier responsibilities and more stringent regulatory requirements.

The courts are more willing to pierce the corporate veil and hold them personally liable. QBE’s D&O insurance policy helps provide them with peace of mind by providing comprehensive cover for such liabilities.

For Small- to Medium-sized Enterprises (SMEs) — Coverage can be bound on the spot so long as the criteria in the Proposal Form are fulfilled.

For Companies that fall outside the criteria of SMEs – please provide us with the latest annual report or audited financial statements and the completed proposal form.

How to obtain a quote? – Please provide us with the completed proposal form

  • Proposal Form
    • Directors & Officers
    • Directors & Officers (SME)

Association Liability Insurance

Despite the non-profit or charitable nature of many associations, the risks they face have increased significantly in recent years. In an era of increased responsibility and accountability, many associations are now discovering that they could incur liability through the services that they provide to their members or to members of the public.

Cover for legal costs and expense is important as litigation involving directors, officers and committee members of an association is often complex and expensive. It is imperative that they have access to specialised and quality legal representation to safeguard their interest in the most effective way.

How to obtain a quote? – Please provide us with the latest audited financial statements and the completed proposal form.

Important Notice:
The above only serves as a general description of our products and services. For full product details and coverage, please check with your local insurance broker or a QBE authorised agent.


Professional Indemnity Insurance | Compare Quotes | iSelect

indemnity insurance

Trying to understand the ins-and-outs of professional indemnity insurance is a real challenge and many professionals struggle to wrap their heads around the intricacies.

There are varying levels and areas of cover, not to mention differences between individual policies. So finding a product that suits your business can prove to be difficult. That’s where we come in, to help untangle some of the knots and make arranging Professional Indemnity insurance a whole lot easier.

What is Professional Indemnity insurance?

Professional Indemnity (PI) insurance is an important form of protection if your business provides specialist services or professional advice.

It’s designed to help respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice.

Professional Indemnity insurance may also help with legal costs associated with responding to or managing claims covered by the policy.

Why would you consider taking out a policy?

It’s an unavoidable fact that all businesses face risk and as a result, all businesses need to have a plan for preparing for it. The best option would be to avoid or eliminate risk entirely but this isn’t always possible. So the only realistic approach is to minimise the lihood or impact—also called mitigation—of the hazard1.

One of the main risks that certain businesses may need to plan for is a claim for compensation, up to and including litigation. It goes without saying that your business always acts with the best of intentions and aims for the highest ethical standards but accidents happen and, as we all know, mistakes can be all-too-easy to make.

Sometimes these mistakes can have significant impacts on your clients. Whether it’s providing bad advice, failing to meet an agreed-upon deadline, making a misdiagnosis, or forgetting to file a document, these seemingly small actions can sometimes cost a client a lot of money or have a dire impact on their health.

How can Professional Indemnity insurance protect my business?

There are several steps you can take to proactively reduce the risk of people making mistakes in your business. For instance, training, implementing better processes and sending reminder memos. But none of these are fool proof. There’s another reliable way to help decrease the impact of a claim or litigation on your business and that’s professional indemnity insurance.

Professional Indemnity insurance works in a similar way to other third-party insurance products.

If you’re involved in an incident leading to allegations of breach of a professional duty, which causes loss or damage to a client, your professional indemnity insurance can help to ensure you don’t have to pay all of the resulting compensation directly (subject to the level of cover and excess).

What is the potential risk of not having Professional Indemnity insurance?

Professional Indemnity insurance helps compensate the other party for loss of business or missed financial opportunities or even injuries. These pay-outs can be substantial, reflecting the significant amount of trust clients place in many professional service providers and the impact that incorrect professional advice or service can have.

Without Professional Indemnity insurance, your business could be liable for 100% of that sum, which could mean bankruptcy or insolvency.

Is Professional Indemnity insurance compulsory?

Not every business is ly to require professional indemnity insurance. For those that do, it can be very beneficial. Any business that provides advice or a professional service to clients could benefit from protecting themselves against potential accusations of professional negligence or malpractice.

For many occupations this decision isn’t an option, it’s a requirement that individuals hold current Professional Indemnity insurance. For example:

  • The Tax Practitioners Board (TPB) has made it a mandatory requirement for registered tax agents2
  • The Nursing and Midwifery Board of Australia requires all enrolled nurses, registered nurses and midwives to hold a minimum standard of professional indemnity insurance3
  • All CPA Australia Public Practice Certificate holders are required to hold professional indemnity insurance as a condition of membership4

What businesses could Professional Indemnity insurance be relevant for?

If your business provides advice to, makes decisions on behalf of, or deliver services to a client, you may benefit both from the peace of mind as well as the financial safety net it can provide, even if it’s not compulsory. This includes professionals such as lawyers, doctors, real estate agents, psychologists, architects and more.

What’s typically excluded in a standard policy?

It’s vital to understand what Professional Indemnity insurance typically doesn’t cover.

If you or a member of your staff were to intentionally cause damage, engage in fraudulent or dishonest dealings with clients, or accidentally and—not associated with your professional service or advice—injure a member of the public or cause damage to their property, your professional indemnity insurance ly will not cover you.

The latter two—personal injury and property damage not associated with your professional service or advice—can be covered by taking out a Public Liability Insurance policy, but often this has to be taken out separately.

It’s also important to understand that professional negligence claims are a complex process with many individual steps to be taken between initial notification and finalising the matter.

What’s the difference between Professional Indemnity and Public Liability insurance?

Professional Indemnity and Public Liability insurance can both help cover your business against third party claims resulting from liabilities that might result from your business activities.

The main difference is that Professional Indemnity insurance covers you for the professional service you provide to clients, while Public Liability insurance provides protection for you and your business if a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities.

How much can Professional Indemnity insurance cost?

Given that every business is unique, offering different types of services and operating in its own particular environment, it stands to reason that these kinds of factors will impact on the cost of policies.

Having a suitable level of professional indemnity insurance protects businesses, both financially and from a reputation perspective. The costs of not having suitable cover could be catastrophic. With iSelect and BizCover you can compare Professional Indemnity insurance quotes from a range of providers and select the policy which suits you.

How do I choose a Professional Indemnity insurance policy?

First things first, leave the hard work to us. iSelect and BizCover will take the pain finding business insurance. Using our comparison service, it’s simple to check professional indemnity policies from a range of insurers. Get started online today, or call us 13 19 20.




Please note that all insurance is subject to the terms and conditions set out in the policy wording or Product Disclosure Statement. The information set out above is general only and should not be relied upon as advice.

Last updated: 27/08/2020


Home indemnity insurance

indemnity insurance

Residential building work contracts in Western Australia are governed by the Home Building Contracts Act 1991 (the Act). If residential building work valued over $20,000 is to be undertaken, the Act requires that a builder take out home indemnity insurance in the name of the owner before accepting payment or commencing work.

What is home indemnity insurance?

HII protects owners against financial loss if a builder cannot complete residential building work or meet a valid claim for faulty or unsatisfactory building work because of death, disappearance or insolvency.

In most instances, the insurance policy must cover the residential building work during the construction period and for six years from the date of ‘practical completion’ (the six year insurance period). Practical completion is when the building, extensions or renovations are completed and ready for occupation.

The Act applies to all areas of the state, however, the provisions of the Act are different when a person builds, extends or renovates their own home as an owner-builder or a builder seeks exemption to build their principal place of residence. This is explained in the ‘Owner-builder requirements’ section of this fact sheet.

Is all residential building work over $20,000 required to have HII?

Residential building work is defined in the law to mean:

  • construction of a new dwelling;
  • extension or renovation of an existing dwelling;
  • placing a dwelling on land; or
  • construction, extension or renovation of multi-unit grouped homes except for some multi-storey developments and fully leased retirement villages.

HII cover is required for all residential building work contracts including:

  • A ‘cost plus contract’. HII must be taken out prior to any building work commencing and provide cover for six years from practical completion.
  • Building or buying a ‘spec’ home. A home built by a registered builder on their own behalf and then sold as a completed home (usually by offer and acceptance). The builder must take out HII prior to the building permit being granted to protect purchasers and any subsequent owners for six years following practical completion.
  • Placing a dwelling on land for the first time. The cover must include the cost of the residence as well as placement and any work to the dwelling after placement. An example of this might be a transportable home.
  • Relocating an existing dwelling to a new site. HII must cover work connected with the relocation, placing the dwelling on the land and work to the dwelling after placement.

Subject to the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002, home indemnity insurance cover is not required for the following types of residential building work:

  • multi-storey multi-unit developments, as defined by the regulations; or
  • retirement villages that are intended to be leased.

Residential building work is required to be covered by HII, however it is not required in the following circumstances:

  • building work under $20,000; and
  • associated work performed alone under separate contracts such as installation of a swimming pool, fence, pergola or landscaping.

Who is responsible for obtaining HII?

A builder carrying out residential building work on behalf of an owner is responsible for taking out HII and for giving the owner a copy of the certificate of insurance BEFORE:

  • starting any residential building work;
  • asking the home owner to pay a deposit; or
  • asking the home owner to pay any other money under a residential building contract.

This protects subsequent owners, if the property is sold during construction or during the period of indemnity insurance.

The insurance premium is paid by the builder. Builders need to make provision in the contract price for the cost of the insurance policy and apply to the insurer to have the work covered. The premium is a one off payment.

The policy will be in the name of the owner so that if the owner sells the residence within the six year insurance period, the benefit of the policy will pass to a subsequent owner(s).

How should builders inform owners about HII?

Before a contract for home building work is signed, or a deposit is paid, the builder must provide the owner with a copy of the ‘Notice for the home owner’ which summarises the main requirements of the Act, including the requirement to take out HII.

A copy of the certificate of HII policy together with the application for a building permit is lodged with the permit authority. The permit authority is able to refuse the application if evidence of HII is not provided.

The HII policy covers the completion of the residential building work at no additional cost to the owner to a limit of $100,000 if the builder dies, disappears or becomes insolvent.

The policy must cover potential claims for defective workmanship made up to six years from practical completion of that work should the builder die, disappear or become insolvent.

The policy must require the insurer to pay up to $100,000 or the value of the contract work (if it is less than that amount) and no more than $20,000 for loss of deposit.

This is the maximum amount that the insurer must agree to pay out while the policy is in force.

The insurer is allowed to charge a $500 excess which means that the owner or their successors in title may have to pay the first $500 of any claim.

Who provides HII and who chooses the insurer?

HII is provided by private insurers that have been approved by the Minister for Commerce. The builder has the option of which insurer to select, provided that the insurer agrees to supply the cover.

Contact Building and Energy or a building industry association for the name of insurers who provide HII. Owners can obtain details of the insurance company or ‘Approved Fund’ providing the insurance cover from the HII certificate or by contacting their permit authority.

What if the builder cannot obtain HII or fails to take it out?

Builders will be able to obtain HII provided they satisfy the insurers criteria. If insurance is refused, the builder should seek advice from their industry association.

A builder who does not take out indemnity insurance as required or fails to comply with any other of the provisions of the Act can be prosecuted and fined up to $50,000, and may risk losing their builder’s registration.

If HII cannot be obtained, the owner should engage another builder who can or if an owner finds that the insurance is not in place when a claim is made, the matter should be referred to Building and Energy on 1300 489 099.

Does HII cover reduce a builder’s liability?

No. The cover does not reduce the liability of a builder during the six year insurance period. The policy will come into effect only if a builder dies, cannot be located, or becomes insolvent. In all other cases a builder will remain responsible for claims made by an owner or successive owners during the six year period following practical completion.

Does HII apply to everyone who builds?

Owner-builders are not required to take out HII before they build, but must do so if they sell within seven years from the date the building permit was granted. A registered builder may seek exemption from obtaining HII when building their own principal place of residence but must do so if they sell within seven years from the date the building permit was granted.

If the work is associated work alone (so not forming part of building contract for a new home) e.g. a swimming pool, carport, fence, pergola or landscaping, HII is not required even if the work is over $20,000. HII is also not required for a subcontractor who performs building work under a contract with a registered builder as it is the builder who obtains HII.

Owner-builder requirements

A person who has owner-builder approval from Building Servies Board and is granted a building permit, is the person responsible for the building work to his/her own home and is not required to take out HII cover.

However, if the residence is sold or otherwise disposed of within seven years of the date the building permit is granted, the cover must be in place. The policy must be from an approved insurer and cover the new home owner(s) for the remainder of the seven year period.

The prospective purchaser should be provided with a valid certificate of insurance before the sale contract is finalised. Failure to do so can lead to prosecution and a $10,000 fine. If HII cannot be obtained, the property cannot be sold within seven years of obtaining the building permit.

Builder’s principal place of residence requirements

The Act provides for a registered building contractor to build their own principal place of residence once every six years without having to obtain HII.

A builder may seek exemption under section 25B(3) of the Act by making a statutory declaration they have not obtained an exemption in the previous six years and undertaking to provide HII to a subsequent owner(s) for seven years from the date the building permit was granted.

Further information

For further information or advice about HII, contact Building and Energy on 1300 489 099 for the cost of a local call from anywhere in the state or email

 The Home Building Contracts Act 1991 sets out what is legally required of builders and owners entering into a contract for residential building work. Copies of this Act can be viewed on the Parliamentary Councel's Office website.

An industry association, or insurer may also be able to assist.

Useful contacts:

Housing Industry Association22 Parkland RoadOsborne Park WA 6017Member line: 1300 650 620


Website: Master Builders Association (WA)Level 435-37 Havelock StreetWest Perth WA 6005Telephone: (08) 9476 9800



First published 24 Mar 2014


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