Professional Indemnity Insurance

Professional Indemnity (PI) insurance provides financial protection for professionals in a wide range of industries.

Businesses that provide a professional service (e.g. accountants, financial planners, management consultants, real estate agents etc.) are regarded by their clients as experts in their fields. In such a litigious environment, clients will not hesitate to make a claim against these ‘experts’ where they believe they have suffered a financial loss as a result of their actions.

In addition, many professional bodies require Professional Indemnity insurance as a pre-requisite to obtaining a practicing certificate or membership of the association.

Professional Indemnity insurance generally indemnifies the insured for a claim that is first made while the policy is in force as a result of a breach of professional duty in respect of the conduct of the professional business.

This class of insurance is written on a ‘claims-made basis’. This means that that the policy provides cover for claims made during the period of insurance in respect of professional services provided after the retroactive date, subject to the terms and conditions of the policy in place at the time. The retroactive date will be specified in the policy schedule

All Professional Indemnity insurance policies will have a ‘limit of indemnity’ and a ‘deductible’. The limit of indemnity is the maximum amount that the insurer will pay for any one claim.

The deductible applies for each claim such that the amount of each claim up to the deductible must be paid by the insured.

Mega Capital is a specialist in Professional Indemnity Insurance for Accounting firms. We have assisted a diverse range of Accounting firms, whose practices differ dramatically by:

  • Revenue size;
  • Mix of activities: including large components of auditing, insolvency, financial planning, corporate advisory mortgage/finance broking, etc; and
  • Claims history

This allows us to provide our Accounting clients with Professional Indemnity advice on a broad range of business activities that they may be involved in. Our knowledge of the Professional Indemnity issues facing this industry and the solutions we deliver are second-to-none in the General Insurance Broking industry.

In addition, Mega Capital is listed by the ICAA as a broker who can assist with their members Professional Indemnity insurance requirements.

A large percentage of our client base consists of Accountants. We have assisted over 15% of the BRW Top 100 Accounting Firms including numerous National practices with their Professional Indemnity insurance requirements.

We have seen that the level of premium and quality of policy coverage can range considerably between insurers and even within insurers.

For example:

  • Average premiums for a $1m limit can range between 0.25% and 2% of revenue;
  • Excesses range between $1,000 and $100,000 and may be each and every claim or each and every claimant;
  • Limits of indemnity may include a reinstatement/s and may be inclusive or exclusive of costs;
  • Fidelity cover may/may not be included;
  • Policy endorsements may exclude claims arising out of:
    • Schemes deemed to be in breach of Part IVA of the ITA Act;
    • Mergers & acquisitions advice;
    • Business valuations and/or due diligence advice;
    • Investment Advice etc.

Therefore, it is important that you choose the RIGHT broker, one that is:

  • Not aligned to ONE insurer and has access to range of insurers
  • A specialist in PI insurance and has a good knowledge of the Accounting industry and the requirements of the Professional Bodies
  • Not just a “fax service” and willing to go into “bat” for you

At Mega Capital, we will ensure that you begin the renewal process early, provide a comprehensive submission to the insurer(s) and that receive your quotation well in advance of the renewal date and NOT at the 11th hour.

Mega Capital is a specialist in Professional Indemnity insurance for Financial Services and Credit Services firms. Our knowledge of the Financial Services industry is second-to-none in the General Insurance Broking industry with a client base consisting of:

  • over 200 Australian Financial Services Licensees including financial planners, fund managers, corporate advisors, stockbrokers, superannuation funds and others
  • over 1000 Australian Credit Licensees and Credit Representatives

We have seen that the level of premium and quality of policy coverage can range considerably between insurers and even within insurers.

For example, for financial planners:

  • Average premiums for a $1m limit can range between 1.5% and 5% of revenue;
  • Excesses range between $5,000 and $100,000;
  • Limits of indemnity may include a reinstatement/s and may be exclusive of costs;
  • Coverage for ARs may or may not be included in the policy;
  • Exclusions may include margin lending, tax effective products, hedge funds, dealing in direct equities, discretionary investments, etc.

Therefore, it is important that you choose the RIGHT broker, one that is:

  • Not aligned to ONE insurer and has access to a range of insurers
  • A specialist in PI insurance and has a good knowledge of the Financials Services and Credit Services industries
  • Not just a “fax service” and willing to go into “bat” for you

At Mega Capital, we will ensure that you begin the renewal process early, provide a comprehensive submission to the insurer(s) and receive your quotation well in advance of the renewal date and NOT at the 11th hour

 

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Professional Risks Insurance Broker
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