Professional indemnity insurance requirements

  • IPA By-law 9.1.9(e) requires all members that hold a Professional Practice Certificate to hold Professional Indemnity (PI) insurance;
  • If a member is a Partner of a firm, the member, the firm and all other Partners of the firm (whether or not they are members of the IPA) must be covered under the PI policy;
  • If an IPA member is a Director, they must ensure that the member, the company and all other Directors and Executive Officers of the company (whether or not they are members of the IPA) are covered under the PI policy;
  • As of 1 January 2019, the insured amount must not be less than $2 million per reinstatement (any one claim), being the cap of the new IPA Professional Standards Scheme;
  • The policy must be obtained from an Australian Prudential Regulation Authority (APRA) regulated insurer;
  • The policy is to insure all services you advertise and provide/invoice to the public;
  • The policy is to include a minimum of one reinstatement, preferably unlimited reinstatements;
  • The policy excess (deductable) is no more than 2% of the policy limit of indemnity or $200,000, whichever is the lower amount; and
  • The policy should be defence cost exclusive. If not and the policy is defence cost inclusive, the policy sets an additional 25% above the policy limit of indemnity amount to fund defence costs.