How much does professional indemnity insurance cost in Australia?

The average cost of professional indemnity insurance in Australia is $40 to $250 per month for small businesses. Low-risk sole traders like freelance writers or bookkeepers sit at the lower end. Architecture, engineering and financial services sit higher.

How much is professional indemnity insurance for your business? That depends on your profession, turnover, staff count, cover level, excess and claims history. Unlike public liability, which covers physical injury and property damage, PI covers financial loss caused by your advice or service errors. Because a single bad recommendation can trigger a large claim, PI premiums tend to run higher than PL for the same business.

At a glance

• Most sole traders pay $40 to $100 per month for PI
• Small businesses with staff typically pay $120 to $250 per month
• Your profession is the biggest cost driver. An IT consultant and a structural engineer pay very different premiums.
• Stepping from $1 million to $5 million cover doesn't cost five times as much. The jump is smaller than expected.
• A higher excess lowers the premium but increases your cost at claim time
• PI is a claims-made cover. Your premium reflects your liability back to the retroactive date.

Professional indemnity insurance cost by profession

Your occupation sets the baseline. Insurers group professions by risk. Higher-risk work means higher premiums.

Ranges are indicative only, based on published Australian data for businesses with fewer than 10 staff and turnover under $1 million. Actual costs depend on your specific circumstances.

Professional indemnity insurance cost by cover level

Doubling the cover doesn't double the cost. Because maximum payouts are rare, the step-up between tiers is often smaller than people expect.

The gap between $1 million and $2 million cover is often only $20 to $40 per month. For many businesses, the extra protection is easy to justify.

How the excess affects your premium

The excess is the amount you pay out of pocket before the insurer pays. A higher excess means a lower premium, but more cost if you make a claim.

• $0 excess: The insurer pays from dollar one. Premiums are at the top of the range. Suits businesses that want zero out-of-pocket cost at claim time.
• $1,000 excess: A common default for many policies. Premiums sit in the mid-range. Most small businesses choose this level.
• $2,500 excess: Reduces the premium noticeably. Works for businesses with few claims and enough cash to cover the excess if needed.
• $5,000+ excess: May lower the premium further but creates real out-of-pocket risk for smaller businesses. More common in higher-turnover operations.

The right excess depends on how often you're likely to claim and how much cash you can cover at short notice. A higher excess isn't always the smart choice. If you can't afford to pay it at claim time, the saving isn't worth it.

What drives the cost

1. Profession and industry. This is the biggest factor in the price. A marketing consultant is cheaper to insure than a structural engineer because the financial impact of a mistake is different.
2. Annual turnover. Higher revenue means more work, more clients and more exposure. Insurers scale the premium to match.
3. Number of staff. More people giving advice means more chances for a claim. Each additional employee or subcontractor adds to the risk profile.
4. Cover level. Higher limits mean a higher price, but not in proportion. See the cover-level table above.
5. Claims history. Past claims push the cost up. A clean record helps keep it down.
6. Retroactive date. PI is a claims-made cover. The retroactive date sets how far back your cover reaches. A longer history means more liability, which may affect the premium. Keeping continuous cover protects that date.

Who must hold PI by law in Australia

Some professions have a legal or regulatory minimum.

AHPRA-registered health professionals. Nurses, physiotherapists, psychologists, occupational therapists, dentists and other AHPRA-registered practitioners must hold PI as a condition of registration.

Financial advisers. AFS licensees serving retail clients must have adequate compensation arrangements under s912B. PI is the standard way to comply.

Tax agents and BAS agents. The Tax Practitioners Board requires registered agents to hold PI at specified levels.

Architects. State and territory architect registration boards require current PI.

Engineers. Some state registration schemes require PI. Requirements vary by state.

If your profession isn't on this list, check your contracts. Many clients and head contractors require PI regardless of whether the law does. For a full breakdown, see who needs professional indemnity insurance.

How to reduce your PI premium

1. Choose the right cover level. Don't over-insure or under-insure. Match the level to your regulatory minimum, client contract requirements and realistic claim exposure.
2. Increase your excess. Moving from $0 to $1,000 excess may drop the premium noticeably. Only do this if you can cover the excess at claim time.
3. Bundle with PL. Some insurers offer a discount when you combine PI and public liability into one policy.
4. Use professional association schemes. Groups like CPA Australia, the Tax Practitioners Board and some industry bodies offer access to group PI rates that may be cheaper than buying standalone.
5. Pay annually. Monthly payments spread the cost but may include a payment fee. Paying upfront for the year avoids that.
6. Keep a clean claims record. The best long-term premium strategy is not to have claims. Strong processes, clear client contracts and good documentation help.

How upcover can help

upcover arranges professional indemnity insurance for eligible Australian businesses. You can compare PI quotes across multiple insurers using your profession, turnover and cover level.

For more on what PI covers, see what is professional indemnity insurance. For the right cover level, see how much PI cover do I need.

• 70,000+ businesses covered across Australia
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Get a PI insurance quote through upcover

upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.

Frequently asked questions

How much does professional indemnity insurance cost for an IT consultant?

IT consultants typically pay $60 to $120 per month depending on turnover, cover level and whether they hold separate IT liability or standard PI. For a sole-trader IT contractor with turnover under $300,000, costs often start around $60 to $80 per month.

How much is $1 million of PI cover?

Around $50 to $80 per month for most low-to-medium risk professions with turnover under $500,000. The actual cost depends on your profession, deductible and claims history.

Is professional indemnity insurance tax deductible?

PI premiums are generally tax deductible to the extent they relate to earning assessable business income. Check with a registered tax agent for your specific situation.

What's the difference between PI and public liability?

PI covers financial loss caused by your advice or service errors. PL covers physical injury and property damage caused by your business activities. Most professional service businesses need both.

Do sole traders need professional indemnity insurance?

It depends on your profession. AHPRA-registered practitioners, financial advisers, tax agents and architects must hold PI. For other professions, check your client contracts. Many require PI before they'll engage you.

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_{The information in this article is general in nature and provided for informational purposes only. It does not constitute personal financial or insurance advice. Cost figures are indicative ranges only, derived from publicly available data across multiple Australian insurance broker and industry sources during 2024-2026, and are not a quote or guarantee. Always obtain a quote specific to your business before making a purchasing decision. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please read the relevant PDS and consider your personal circumstances. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}