Professional Indemnity Insurance (PII) is a type of liability insurance that provides cover for the financial consequences of neglect, error, or omission by the professional in the performance of their professional services. In Australia, PII is also known as Professional Liability Insurance or Errors and Omissions cover. It is designed to protect professionals against claims of negligence or breach of duty made by a client as a result of receiving professional advice or services for a fee.
PII is important for professionals who provide advice or services for a fee, such as accountants, designers, IT specialists, and engineers. It covers claims made against the professional for alleged negligence or breach of duty arising from an act, error, or omission in the performance of their professional advice or service. PII covers the cost of litigation, which can be significant, and enables the professional to pursue legal avenues to clear their name and defend their reputation with the backing of a legal and insurance team.
It is worth noting that PII is not a one-size-fits-all solution, and the coverage and premiums can vary depending on the profession, the level of risk, and the insurer. Some states in Australia require certain occupations or industry sectors to hold PII as a mandatory requirement before an operating license is granted.
