Insights and Resources

Whether you are retiring, changing careers, closing down your business, taking a career break or trying to cut costs when money is tight, cancelling your Professional Indemnity (PI) insurance might seem like an easy way to save money.

Ask almost any self-employed tradie, creative, or consultant why they signed up for Public Liability (PL) insurance, and you’ll usually get the same honest answer: "Because a client forced me to send them a Certificate of Currency before I could start."

Yes, Professional Indemnity (PI) insurance premiums are generally tax-deductible for Australian sole traders because they are business expenses associated with the professional services they provide and the income they earn. This reflects the Australian Taxation Office (ATO)’s general rule that expenses incurred in earning assessable income may be deductible.

Professional Indemnity (PI) insurance is designed to respond to claims alleging that a client suffered financial loss due to professional advice, services, errors or omissions. Depending on the policy, it may help cover legal defence costs and compensation that the insured is legally liable to pay.

One client complaint can quickly become more than an uncomfortable conversation. If a client alleges your advice, design, strategy or service caused financial loss, you may need to respond formally, even if you believe you did nothing wrong.

Not every business carries the same kind of risk. A photographer carrying gear to a shoot location faces a different exposure than a florist delivering arrangements to a venue, yet both could still face a claim.

A landlord is asking for proof of liability cover before handing over the keys to a new studio. A market stall booking for tomorrow morning is confirmed only if you have cover. A client will not sign off on a project until they see proof of insurance. These requests tend to arrive with little notice.

Running your own business means taking responsibility for more than the work you deliver. Whether you teach classes, meet clients, attend events, visit job sites or sell products, there is always a chance someone could claim your business caused injury or property damage.

When a customer, client or member of the public alleges injury or property damage connected to your business, the next steps you take can affect how smoothly the public liability claim is assessed.