What is Professional Indemnity (PI) Insurance?
PI Insurance provides financial protection to business operators and covers the costs of defending claims (including any damages that may become payable). A policy aims to shield your assets in the event of a claim where your client (or another person) suffers financial loss as a result of your alleged errors or omissions.
Mandatory PI Cover
The following licence classes MUST hold PI Insurance Cover to a specified level:
Building Design (Open, Medium Rise and Low Rise)
Termite Management Chemical
Hydraulic Services Design
Site Classifier
Completed Residential Building Inspection
Passive Fire Protection - Fire Collars, Penetrations and Joint Sealing
The Financial Requirement for Licensing booklet contains the level of indemnity required for each licence class.
PI required for Certification only
The following licence classes must hold PI Insurance where the licence includes certification:
Passive Fire Protection - Fire Doors and Shutters
Passive Fire Protection - Fire and Smoke Walls and Ceilings
Special Hazard Suppression Systems
Sprinkler and Suppression Systems (Reticulated water based)
Fire Pumps
Fire Hydrants and Hose Reels
Portable Fire Equipment and Hose Reels (Hose reels down stream of stop cock only)
Fire Detection, Alarm and Warning Systems
Emergency Lighting
Fire Suppression Systems - Special Hazards
The Financial Requirement for Licensing booklet contains the level of indemnity required for each licence class.
Evidence of holding PI Insurance
If you are required to hold PI Insurance you must provide evidence at application, renewal or if audited. If the policy expires outside of renewal, you must provide evidence of the renewed policy at that time.
Acceptable evidence of cover
If the policy complies with the Insurance Contracts Act 1984 (Cth) a Certificate of Currency signed by the insurer should be provided.
If the policy has been arranged by a general insurance broker registered under the Insurance (Agents and Brokers) Act 1984 (Cth) a Certificate of Currency and a receipt from the broker.
Automatic exemption from holding PI Insurance
The holders of a Nominee Supervisor, Site Supervisor or Fire Protection Occupational licence are not required to provide any financial details to BSA, including PI Insurance.
Requesting an exemption from holding PI Insurance
Click here for more
Failure to provide proof of current PI Insurance (originals or copy) or an exemption request at the time of application, renewal or when otherwise requested may result in the suspension or cancellation of your licence - click here for more.
Exemption from meeting the full FRL by holding PI
Applicants or licensees holding the following licence classes, and who comply with the prescribed conditions, are not required to provide financial information but can, instead provide evidence of holding Professional Indemnity Insurance:
Builder Project Management Services – see section 1.5.2 of the FRL Policy for conditions
Building Design Low Rise – see section 1.5.3 of the FRL Policy for conditions
Building Design Medium Rise - see section 1.5.3 of the FRL Policy for conditions
Building Design Open - see section 1.5.3 of the FRL Policy for conditions
Hydraulic Services Design - see section 1.5.3 of the FRL Policy for conditions
Hydraulic Services Design (excluding design of on-site domestic waste water management) - see section 1.5.3 of the FRL Policy for conditions
Site Classifier - see section 1.5.3 of the FRL Policy for conditions
Site Classifier (excluding on-site domestic waste management) - see section 1.5.3 of the FRL Policy for conditions
Note: You cannot utilise this provision if you already hold, or are applying for, a contractor licence in a class other than those mentioned directly above e.g. you hold a Carpentry contractor licence and Site Classifier licence. In this instance you must comply with the full FRL policy click here for more.
Providing Estimated Annual Turnover
Where you provide PI insurance instead of financial documentation you are also required to nominate an Estimated Annual Turnover - click here for more.
What if I have been granted a PI Exemption?
If a PI Exemption is applied for, and granted, you are not eligible for the exemption from providing financial information. You will be required to comply with the full Financial Requirements for Licensing policy.
