fbpx

Book an appointment here

Professional Indemnity Insurance

Get the right cover from top insurance companies

Or call us on 0800 374 691

WE WORK WITH TRUSTED A-RATED INSURANCE COMPANIES

Frequently asked questions about professional indemnity insurance

Professional indemnity insurance is one of the most common insurance policies held by businesses and professionals across New Zealand. We’ve gathered some of the most frequently asked questions to provide clarity on this often misunderstood form of coverage.

Professional Indemnity Insurance Requirements and Coverages

Is Professional Indemnity Insurance Required by Law in NZ?

While Professional Indemnity (PI) insurance is not a legal requirement across the board in New Zealand, some professions are required by their regulatory bodies or professional associations to have this coverage. This typically includes professions like lawyers, accountants, engineers, architects, and some healthcare professionals. 

What Does Indemnity Insurance Cover?

Professional indemnity insurance can cover the legal costs and any awarded damages if a client sues you for a loss they believe occurred due to your professional advice or services. 

How Much Professional Indemnity Insurance Coverage Do I Need?

The amount of PI coverage needed varies greatly depending on the nature of your profession, the size of your business, and the types of clients you serve. Typically, coverage can range from as little as $500,000 to as much as $10 million. The amount is extremely dependent on the business so it is best to talk to one of our advisors about this. 

Do Contractors and Specific Professions like Electricians Need Indemnity Cover?

Contractors and tradespeople, such as electricians, can also benefit from professional indemnity insurance, especially when part of their work involves design work. Even if you’re extremely careful in your work, there’s always a chance that something could go wrong, and you could be held liable. Having professional insurance in place can safeguard against potentially substantial financial loss.

Professional Indemnity Insurance in New Zealand

Professional indemnity insurance in New Zealand has some unique features that set it apart from other types of insurance, and not every business in NZ requires it. Its cost varies depending on several factors.

What is Unique about Professional Indemnity in New Zealand?

In New Zealand, professional indemnity insurance operates on a ‘claims made’ basis. This means it covers claims made during the policy period, regardless of when the alleged incident occurred, provided it is after the retroactive date specified in the policy.

Does Every Business in NZ Need Professional Indemnity Insurance?

While it’s not a legal requirement for all businesses in NZ, it’s highly recommended for any business providing professional services or advice. This includes consultants, IT professionals, real estate agents, and more. This type of insurance is crucial in protecting businesses from potential claims resulting from errors or omissions in their service.

Is Professional Indemnity Insurance Expensive in New Zealand?

The cost of professional indemnity insurance in NZ varies based on your business type, size, and the level of risk involved. Higher-risk businesses require higher coverage levels and hence higher premiums. However, when you consider the potential financial impact of a claim, investing in professional indemnity insurance is a wise business decision.

Buying Professional Indemnity Insurance with Gerrards

At Gerrards, we make the process of purchasing professional indemnity insurance smooth and straightforward.

How Long Does it Take to Buy Professional Indemnity through Us?

We can secure multiple quotes from top insurers in less than 24 hours. We will help you understand coverage limits and find the best fit for your business, and then send you a certificate.

Professional Indemnity Insurance Certificate

A professional indemnity insurance certificate serves as proof of your insurance coverage. This document details the terms of your coverage, including the policy period, the amount of coverage, and the insurer’s details.

What Industries Can We Cover?

Gerrards can provide professional indemnity insurance coverage for any industry. We understand that every industry has unique risks, and we tailor our policies to meet those specific needs.

How Much Professional Indemnity Do I Need?

The amount of professional indemnity coverage you need varies depending on your business type and size. Gerrards’ team can guide you to determine the appropriate coverage for your business.

Professional Indemnity Insurance Claims

Understanding how to make a claim and common claims scenarios is essential to utilise your policy effectively.

How Do I Make a Professional Indemnity Insurance Claim?

You can contact Gerrards, and we will handle the rest. We will liaise with the insurance company on your behalf, making the process less stressful for you.

Common Professional Indemnity Claims

Here are three common professional indemnity claims scenarios:

A marketing consultant promised specific results based on their strategies, but the client did not see the promised growth.

An accountant made errors in the client’s tax calculations, leading to hefty fines from the tax authorities.

An engineer failed to account for the soil condition in their design, resulting in significant construction delays and additional costs.

Professional Indemnity Insurance Policy Changes

Understanding what happens when changes are made to your insurance policy is crucial for maintaining coverage.

What Happens if I Need to Change My Insurance Later?

If your business circumstances change and you need to adjust your coverage, contact Gerrards. We can review your policy and advise on necessary amendments to ensure that you have adequate coverage.

What Happens if I Cancel My Professional Indemnity Policy?

If you cancel your professional indemnity policy without a replacement, your business becomes exposed to risks. Claims made after the cancellation of your policy will not be covered, regardless of when the alleged incident occurred.

Comparing Professional Indemnity Insurance with Other Policies

Different types of insurance provide different types of coverage. Here’s how professional indemnity compares with other policies.

Professional Indemnity vs Public Liability

While professional indemnity insurance covers losses arising from professional errors or omissions, public liability insurance covers claims for personal injury or property damage caused by your business operations. Both are crucial for comprehensive business protection.

Professional Indemnity vs Indemnity

These terms are often used interchangeably as they refer to the same type of insurance.

Professional Indemnity vs Employers’ Liability

Professional indemnity covers claims arising from your professional services or advice, whereas employers’ liability insurance covers claims from employees who have suffered injury or illness due to their work.

Do you have further questions about professional indemnity insurance?

We hope this guide has shed light on the intricacies of professional indemnity insurance in New Zealand. However, we understand that every business is unique, and you might still have questions specific to your situation. At Gerrards Insurance Brokers, we’re here to help. If you have any further queries about professional indemnity insurance, or any other insurance need, please don’t hesitate to contact us. Our team of experienced professionals is always ready to provide personalised advice and solutions tailored to your business. 

What our clients are saying: