Professional Indemnity & Liability Trends
Austcover
13 Oct 2025
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After several years of pricing volatility and tighter underwriting, the professional indemnity (PI) market in 2025 is starting to show signs of easing. While many professions now benefit from reduced premiums and increased insurer appetite, others, particularly in engineering, legal and financial services, generally still face challenges securing affordable, appropriate cover.
For risk managers, brokers and professionals alike, now is the time to revisit how coverage aligns with contract obligations, claims trends and emerging exposures.
The professional indemnity market has generally been softening since late 2024. For some financial services, such as wholesale funds and asset managers, rates have dropped back to levels not seen in nearly a decade. As a result of this, many insurers are offering 5–10% premium reductions for low-risk profiles, particularly where there is a strong compliance record and minimal claims history.
However, this relief is not universal across all sectors. Engineers involved in infrastructure and high-rise projects, legal professionals handling complex disputes, and financial advisers in high-complaint sectors continue to face scrutiny and, in many cases, tougher market conditions.
Capacity for high-risk placements remains limited, and many underwriters are demanding more detailed risk data and a clear demonstration of compliance processes before terms are offered.
One issue often overlooked is how professional indemnity limits and excesses align with client contracts. Many agreements, especially those in the above-mentioned sectors, specify minimum PI cover or require certain excess structures.
Where this isn’t closely managed, businesses can face breaches of contract, coverage gaps or disputes over liability. A careful review of contract wording against your policy terms is essential.
Where projects are one-off or significantly larger than usual, consider project-specific PI coverage or a one-off limit uplift.
ASIC has made it clear that in 2025, it’s taking a stronger approach to cracking down on misconduct, especially in the financial and corporate world. The regulator’s latest priorities show a clear focus on protecting consumers and keeping the market sustainable, especially as new risks and issues continue to emerge.
They’re keeping a closer eye on things like misleading behaviour, poor governance, lack of proper disclosures, and directors not doing their jobs properly. Areas like greenwashing, exploitative superannuation models, insider trading, and bad financial and insurance advice are all under the microscope. The impact of these new regulations already came into action last year, with ASIC increasing its new investigations by 25% from the previous year.
For businesses, this means more pressure to be upfront, transparent and on top of compliance. With more resources going into surveillance, data tracking and legal action, ASIC is moving faster and watching more closely than before.
If you’re in insurance or advisory services, it’s more important than ever to have strong internal processes, clear disclosures and regular compliance checks. ASIC isn’t waiting for problems to pop up—they’re actively looking for them. If you’re in a high-risk area or offer professional advice, now’s the time to take notice and stay ahead.
The volatility seen in the Architects & Engineers (A&E) professional indemnity market over the past two years is beginning to settle, with 2025 expected to bring more stability. While capacity remains limited, pricing has largely levelled out.
However, three key pressures continue to shape underwriting and claims activity:
Professional indemnity cover is still accessible across most engineering disciplines, but insurers are taking a more selective approach. Firms with defined scopes of service, strong workflow documentation, and strong quality assurance protocols are better positioned to secure favourable terms.
While claims frequency in the legal profession has remained relatively consistent, the severity and cost of claims are trending upward, particularly in areas like conveyancing, commercial litigation and estate planning. These matters often arise from:
Insurers are now scrutinising risk management practices more closely. This includes how firms supervise junior staff, conduct file reviews and maintain ongoing training.
Sole practitioners and small firms remain disproportionately exposed and should take proactive steps, such as documenting advice thoroughly, implementing early intervention processes and regularly reviewing systems and workflows. Demonstrating strong governance and professional standards can not only reduce the likelihood of a claim but also improve the chances of securing affordable, adequate PI cover.
Financial services professionals are facing increasing scrutiny, with the new 2025 enforcement priorities zeroing in on greenwashing, substandard member services, and cyber governance failures, particularly where advice processes are poorly documented or compliance systems fall short.
Between 1 July and 31 December 2024, ASIC recorded 71 enforcement outcomes across advice, credit, superannuation, insurance, and investment management—an upward trend expected to continue as oversight becomes more strict and data-driven.
High-risk areas attracting claims and regulatory focus include:
Well-governed practices with strong documentation, transparent processes and effective client communications may still attract premium savings. However, firms with systemic prior complaints or exposure to controversial products can expect tighter underwriting terms, higher excesses or limited market appetite.
Some professions still fall into “hard-to-place” categories—either because of previous claims, high exposure work, or the perceived volatility of the sector. For these clients, securing adequate coverage can be difficult.
Approaches that can help:
Keep in mind that some markets offer limited aggregate coverage or exclude certain activities, so it’s important to continually review endorsements and exclusions carefully.
One of the most important features in a PI policy is the retroactive date. The retroactive date in a professional indemnity policy determines how far back the cover applies for claims made during the policy period. It plays a central part in managing liability for past work.
A common issue we see with clients is the unintentional resetting of the retroactive date. This can happen when switching insurers or missing a renewal, leaving earlier work without any cover if a claim is made down the track. If there’s any concern about past matters, such as during a business closure, sale, or restructuring, it’s important to review options, including:
If you’re unsure if your retroactive date or cover is still in place for earlier work, now is the time to check. Waiting for a claim to occur is too late to make changes.
With market conditions shifting and regulatory oversight tightening, professional indemnity cover needs to be more than a renewal task—it should be a considered part of your broader risk strategy.
Don’t wait for a claim or compliance issue to expose a gap in your policy. Speak with Austcover today to review your cover, assess your exposure and make sure your insurance reflects the reality of your business in 2025 and beyond.
All information in this article is of a general nature, and has been prepared without taking into account your individual objectives, financial situation, or needs. Before acting on any information contained herein, you should consider its appropriateness to your circumstances. The information provided is not intended to replace any accounting, financial, insurance broking, legal, tax, or other professional advice. Austcover Pty Ltd ABN 46 073 425 662 holds Australian Financial Services Licence No. 241799. Visit: our legal policies and disclosures page.