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What Professional Services Insurance Covers
Professional services insurance covers the advice, the data, the people and the office of a business that sells expertise: accounting and audit firms, legal practices, consultants, financial and insurance services, IT and technology companies, structural engineers and architects, marketing and creative agencies, and education and training providers.
The main claim is professional: an error, an omission, negligence or wrong advice that costs a client money, and the compensation and legal costs that follow. A tax calculation goes wrong. A contract clause is missed. A consultant's recommendation fails. A system an IT firm built goes down. A structural design has a flaw that shows up after construction. Each is a claim years in the making.
Professional firms also hold the most sensitive data in the economy: client files, financial records, commercial secrets. A breach can mean notification under the Notifiable Data Breaches scheme, regulatory attention, business interruption and third party claims, which is where cyber insurance sits. The office itself still needs public liability insurance for a visitor who trips on the stairs.
Fortis Risk Solutions arranges professional services insurance for firms across Australia from offices in Box Hill and Hawthorn, as part of our business insurance range. We look at what you advise on, the contracts you sign, the data you hold and the licences you carry before approaching insurers. The core is professional indemnity insurance, built around your profession rather than a generic wording.
Who this covers
Every profession has its own professional indemnity wording and its own regulator. The notes below show what changes.
Accounting and audit firms
Tax errors, audit opinions and advice relied on by lenders and investors. Professional indemnity at the limit the professional body requires, cyber cover for client financial data, and fidelity for client money handled by the firm.
Legal practices
Missed limitation dates, drafting errors and conflicts. Professional indemnity usually sits with the compulsory scheme in each state, with top-up cover above it, plus cyber cover for the trust account and client files, and management liability for the partnership.
Consulting firms
Advice that clients act on. Professional indemnity written for the consulting field, contractual liability checked against each engagement letter, and cyber cover for client data. Run-off cover when the practice winds up.
Financial and insurance services
Advice under a financial services licence, with the licensee setting minimum professional indemnity requirements. Professional indemnity that meets the licence conditions, cyber cover for client financial records, and management liability for regulatory investigations. See the financial services insurance page.
IT and technology services
Software, systems and managed services that clients depend on. A technology liability wording that combines professional indemnity with the firm’s own cyber exposure, products liability for hardware supplied, and contractual liability checked against service level agreements.
Structural engineering and architectural design
Design errors that show up after construction, sometimes years later. Professional indemnity with a retroactive date that covers all past projects, run-off cover on retirement, and public liability for site inspections. See the architects and design insurance page.
Marketing and creative agencies
Campaigns, content and client data. Professional indemnity with intellectual property and defamation extensions, cyber cover for client accounts and platforms, and contractual liability checked against client agreements.
Education and training providers
Teaching, assessment and advice, with students on site and on placement. Professional indemnity for the training delivered, public liability for students, abuse liability where children are taught, and management liability for regulatory investigations.
Professional Services Insurance: Cover Sections and Benefits
Professional Services Insurance FAQs
Professional indemnity is the base, and for many professions the licence or the professional body requires it at a set limit. Cyber cover follows, because every firm holds client data. Public liability covers the office, and a business insurance package covers the contents, with business interruption insurance for the fee income lost after damage. Firms with staff add management liability for employment claims and hold workers compensation separately.
The policy that responds is the one in force when the claim is first made against you, not the one that was running when the work was done. Two things follow. Cover has to stay continuous, because a gap leaves old work uninsured. And a circumstance that might become a claim should be notified as soon as it is known, so it attaches to the current policy rather than falling between two.
A technology firm needs a professional indemnity wording written for technology, often called IT liability, which responds to claims that the software, the system or the service failed to perform. It can combine with cyber cover for the firm's own breach costs and with public liability for physical damage. A general professional indemnity wording may exclude or limit technology claims, so the wording matters.
Claims can arrive years after the work, so a professional who stops trading needs run-off cover: professional indemnity kept in force after closure for a period of years, so claims about past work can still be notified. The purchaser of a firm does not automatically inherit the cover for work done before the sale. Run-off is negotiated before the policy lapses, not after a letter arrives.
Their professional indemnity has to extend to the advice and the training delivered, and public liability has to cover students on the premises and at placements. Providers working with children carry additional requirements, and claims involving abuse allegations need a wording that responds, which many standard policies exclude. Registered training organisations also face regulatory investigation costs, which management liability can answer.
Professional indemnity wordings differ in retroactive dates, exclusions for particular activities, contractual liability and the treatment of fee disputes. FRS helps you disclose the services and the contracts accurately, structure the limit against the size of the engagements and the licence requirement, compare specialist professional insurers and act as your advocate when a client makes a claim.
Related pages
Dedicated pages in this group: Financial Services Insurance
Related industry groups: Health and Care Services Insurance, Community, Education and Public Sector Insurance, High Value and Complex Business Insurance
Talk to a broker about Professional Services Insurance
Call 03 7046 3766 on weekdays between 9:30am and 6pm, email admin@fortisrisksolutions.com.au, or send an enquiry and a broker from our Box Hill or Hawthorn office will come back to you about professional services insurance. Tell us what the business does and what the lease or contract asks for, and we take it from there.