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How much does Professional Indemnity Insurance cost?

On average, small business owners can expect to pay around $112.28 per month for Professional Indemnity insurance.

We have analysed data from 500 businesses across New Zealand who took out a stand-alone Professional Indemnity insurance policy through BizCover in 2017. The sample includes businesses across many different industries, however all have 20 or fewer employees.

As you can see from the below graph though, over a third only pay between $45 and $74 per month.

The cost of Professional Indemnity insurance depends on a number of key factors including:

  • The type of business you operate – the riskier the industry or business, the higher the premium is likely to be
  • Your business size and turnover
  • The amount of insurance cover you require
  • The individuals being covered – are they qualified for the job they are performing
  • Previous claims history

Traditionally, Professional Indemnity, also known as PI insurance, was generally only required for occupations such as doctors, lawyers and accountants, however these days most businesses that provide a professional service or give advice require it to protect against legal costs and claims for damages that may arise from a breach of professional duty.

The quickest and easiest way to find out how much a policy would cost for your business is to simply click on the button below to compare quotes.

What is the average monthly premium for Professional Indemnity insurance?

From our analysis, we have found that over 60% of BizCover customers are paying somewhere between $45 to $99 per month for their PI insurance, despite the average cost being $112.28.

Below is the full breakdown:

*Data based on New Zealand BizCover customers

What is the average cost of Professional Indemnity insurance by industry?

Occupation type is one of the biggest determining influences on pricing of Professional Indemnity insurance policies. The higher the associated risk of service or advice you provide, or the higher a potential claim could end up costing, the higher the insurance premium will most likely be.

As you can see from the below graph, Real Estate Agents and Engineering consultants pay a much higher premium than, say, Multi-media and Marketing consultants or Bookkeepers. This is because Real Estate Agents and Engineers are more likely to have a claim for negligence brought about them, and the potential value of such claims is also much higher than other types of occupations. For example, imagine the losses that might occur if an engineer made an error in the design of a bridge and it subsequently collapsed, or a Real Estate Agent failed to disclose a significant defect in a multi-million property they sold.

It is important to note, however, that each insurer has their own preferred  occupations. What one insurer may consider a high risk occupation may not be considered as high risk by the next, which is why it’s important to shop around and compare quotes before purchasing a policy.

*Data based on New Zealand BizCover customers

How much do Consultancy occupations pay for Professional Indemnity Insurance?

Just as there are many different types of consultancy occupations, the premiums can vary greatly between them too. Again, this is partly due to the scope of work each type of consultant conducts, as well as the level of cover that is required. However, there is no doubt that Professional Indemnity insurance is an essential form of cover for all types of consultants.

Out of those who purchased their insurance through BizCover, Management Consultants and Business Analysts tend to pay higher premiums than other types of consultants, such as Education Consultants and Business Coaches. This is no surprise considering the type of highly sensitive information Management Consultants and Business Analysts handle, as well as their obligations in offering recommendations on make-or-break business decisions.

Here are the average premium our top 10 Consultancy occupations are paying for their Professional Indemnity


*Data based on New Zealand BizCover custom

Does the size of my business affect the premium?

Size really does matter – when looking at the cost of Professional Indemnity insurance at least.

Two factors that determine the size of a business are the number of people the business employs and the amount of turnover it generates. Looking at the graphs below, both do affect the cost of the premium, however the amount of revenue generated has a greater influence.

A high turnover is an indication that you do a greater volume of work, and the more work you do, the greater the chance of something going wrong and a claim being made against you. A larger turnover could also indicate that you take on high value contracts which would mean expensive settlements if things don’t go to plan.

*Data based on New Zealand BizCover customers

Does the level of cover affect the premium?

The Professional Indemnity policies provided by BizCover offer cover limits between $250K to $10M, although the most popular level of cover taken out by BizCover customers in New Zealand is $1M with these policies averaging around $97 per month.

The table below provides an indication of premium by level of cover, yet the other factors discussed above have also influenced these figures. For example, you can see that the average cost of $750K of cover is more expensive than the average cost of a policy with $1M cover limit, which could be due to the type of businesses that have opted for $750K cover, i.e. they have a higher risk compared to those who took out $1M cover.

When deciding on how much cover you need there’s a number of things to consider, including:

  • Legislative and/or industry association requirements – often set minimum amounts are required for some types of occupations
  • The size of the contracts you accept – think of how much you could be liable for if something goes wrong, i.e. are you a structural engineer consulting on multi-million dollar developments, or a graphic designer consulting to small-scale organisations?
  • Do you have contracts with customers who require you to have a specific level of cover?
  • The worst case scenario from the advice or service you provide – what are the maximum damages a client could claim for if they suffered financial or health losses?
  • How many employees you have – generally, the more employees you have, the higher the cover limits you need. Imagine if you were unfortunate enough to end up facing multiple claims at once. Highly unlikely, but it could happen!

What is the average monthly cost of Professional Indemnity insurance by level of cover?

Coverage levelAverage Public Liability premium (Monthly)
$250k$77.63
$500k$82.94
$750k$141.89
$1 Million$96.95
$1.5 Million$150.68
$2 Million$157.18
$2.5 Million$97.75
$3 Million$345.65
$5 Million$188.45
$10 Million$239.33

*Data based on New Zealand BizCover customers

Infographic showing the average cost of Professional Indemnity Insurance

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