Financial advisor insurance

Protect yourself from legal action with financial advisor professional indemnity insurance

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If you're a financial advisor, you can be sued for offering advice or services that result in a client suffering a financial loss. Luckily, professional indemnity insurance can help. It can pay for legal fees and compensation owed, but it can also afford you the time and money to defend yourself and your reputation.

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What types of risks might a financial adviser face?

Financial advisers are subject to allegations including:

  • Incorrect or inappropriate financial advice
  • Deceptive or misleading conduct
  • Failing to recommend or arrange insurance
  • Inappropriate estate planning
  • Privacy breaches
  • Employee fraud and dishonesty


What does professional indemnity insurance cover?

Professional indemnity insurance is a form of liability insurance that covers professionals against negligence claims that arise from an act, omission or breach of professional duty. If a professional provides advice or services that result in a client suffering a financial loss, that client may choose to sue in order to recover the loss. Professional indemnity insurance will cover the costs associated with defending a lawsuit and any damages that might be awarded to the client.

Specific types of claims that are covered

Professional indemnity insurance policies vary, depending on occupation and industry, but cover will usually include protection from risks such as:

  • Providing incorrect information or advice
  • Breaching confidentiality or privacy rules
  • Having a conflict of interest
  • Loss of documents
  • Not following a client's instructions
  • Defamation, libel or slander
  • Breach of contract
  • Intellectual property rights infringements.

Cover in this day and age

These days many professionals are required to have professional indemnity insurance cover. Where once PI insurance was reserved for professions such as doctors and lawyers, PI is now taken out by a range of professionals from accountants and builders to engineers and financial advisers.

Financial advisers, insurance and regulation

Unfortunately, since the collapse of some high profile financial planners and managed investment schemes, insurers have tightened the rules for financial advisers. Advisers seeking professional indemnity insurance will now find there are fewer insurers providing PI, with higher premiums than other industries.

The Australian Government's recent reforms to financial services regulations have also seen insurers move to limit their exposure to certain asset classes such as property trusts, mortgage funds and real estate investment trusts. However, those financial advisers who have a clean claims history can still obtain professional indemnity insurance at a reasonable price.

How to compare professional indemnity insurance for financial advisers

When comparing professional indemnity insurance policies, it is important to go beyond price and look at what is and is not covered in the policy.

Questions to ask about your cover

  • Is it specific to your industry and does it cover you for all the possible exposures mentioned above?
  • Does the insurer understand your industry and do they specialise in your type of liability cover?
  • What are the policy's exclusions? These are key to discovering whether the policy provides you with the cover you need.
  • What amount of excess will you have to pay? There's little point in having a cheap policy if you must absorb a large proportion of the cost when making a claim.
  • What support is provided? Will you have access to professional advice about your claim and will it be managed by a dedicated claims team?

Other features to check off

Other cover items you should check include:

  • If the policy has an approved product list
  • It covers any subcontractors employed by you
  • Covers awards made against you by external dispute resolution bodies
  • Whether it is Australian-only or worldwide cover

Only you can accurately assess whether a policy meets your specific needs, but it can also be beneficial to seek professional advice when looking for the right professional indemnity insurance for financial advisers.

Find out more about professional indemnity insurance

Public liability cover for financial advisers?

Public liability insurance covers any liability a business might incur for personal injury to a third party or damage to third party property.Third parties can include members of the public, visitors to your premises, sub-contractors and even trespassers on your property.

So why does a financial adviser need public liability insurance? The short answer is that every professional, in every industry, needs public liability insurance. If you have a business premises or you visit clients in their homes or businesses, you can be held liable for any injuries or property damage you cause. Public liability insurance covers not only your business, but any subsidiary companies you own and also your employees.

When purchasing professional indemnity insurance, it is normal practice to take out public liability insurance at the same time. While the cost will be influenced by the size of your business, it is generally not expensive and should not be overlooked.

Can I get income protection for myself or for my employees?

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Get a quote directly from an insurer

Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options
AAMI Income Protection
Up to
5 years
14, 28, 60 or 90 days
If you’re an existing AAMI customer, you can save 5% on income protection. New customers can get one month free by paying annually.
Insuranceline Income Protection
Up to
5 years
14, 28, 60 or 90 days
Get a $100 bonus gift after 2 months. Plus, and get 12 months cover for the price of 11 if you pay annually. T&Cs apply.
NobleOak Income Protection
Up to 65
30 or 90 days
With NobleOak, you can lock in a policy with a benefit period covering you up to the age of 65. Cover limits may go as high as $25,000.
Suncorp Income Protection
Up to
5 years
14, 28, 60 or 90 days
Sign up and become a member of Suncorp Benefits. Access savings of up to 15% from major retailers. Existing members can get a 5% discount off their policy.
Commbank Income Protection by AIA Australia
Up to
2 years
30, 90 days
Apply by 23 June 2021 and get 20% off your first year of income protection premiums. T&Cs apply.
RAC Income Protection
RAC Income Protection
Up to
2 years
30 or 90 days
You can get cover of up to 75% of your income, to a limit of $10,000 per month, with RAC.
RACQ Income Protection
RACQ Income Protection
Up to
2 years
30 or 90 days
Buy your income protection online and save 25% on your first year’s premium. This offer ends after 22 June 2021.
Bendigo MaxLife Income Protect
Bendigo MaxLife Income Protect
Up to
2 years
30 or 90 days
Take advantage of a 5% joint policy discount with Bendigo. Also, you can unlock policy savings through the wellbeing programme AIA Vitality.

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Frequently asked questions about professional indemnity insurance

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Apply for professional indemnity insurance for financial advisers

Due to tighter government controls and some notable collapses in the wake of the GFC, professional indemnity insurance has become more expensive than most other types of insurance. However, given the nature of a financial adviser's role and the degree of risk you are exposed to, it is a form of insurance that you must have, not just to satisfy regulations, but to give you peace of mind, knowing that if something goes wrong, you won't lose your business and your assets.

Receive quotes for professional indemnity insurance for financial advisers

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*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

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2 Responses

    Default Gravatar
    SkyeAugust 19, 2016

    If my financial planner was not up-to-date with paying his insurance installments, are investors still able to sue the financial planner for fraud and receive compensation for their losses?

      Avatarfinder Customer Care
      RichardAugust 22, 2016Staff

      Hi Skye,

      Thanks for your question. is a comparison service and we are not permitted to provide our users with personalised advice. You may wish to speak with a legal professional about these matters.

      All the best,

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