Who must hold professional indemnity cover? Rules, contracts and how to check yours

No single law makes professional indemnity cover compulsory for everyone who gives advice. It is required of some groups by a specific rule, such as authorised financial services providers, and of many others by the contracts they sign. To know whether it is required of you, find the rule or clause that says so.

Is professional indemnity cover compulsory?

Not as a general rule. The professional liability hub describes the position this way: for several professions the cover is required by a professional body or a licence, and for many more it is required by the contracts their clients sign. That is why the request form asks whether a contract demands it.

A requirement comes from one of three places:

1. A statute or notice that applies to your licence. The FAIS notice below is an example.
2. A rule of your professional body. Check the body's current rules; a body's requirement is only as good as the rule you can point to.
3. A contract. A client, employer, tender or landlord may require cover and may name a limit and an insurance period.

This guide names a requirement only where it could be traced to a primary source.

What does the FAIS notice say?

Financial advisers and intermediaries who are authorised financial services providers are covered by Board Notice 123 of 2009, the Notice on Requirements for Professional Indemnity and Fidelity Insurance Cover for Providers, 2009. In it the Registrar of Financial Services Providers, acting under section 13 of the General Code of Conduct for Authorised Financial Services Providers and Representatives, 2003, requires all providers to maintain suitable professional indemnity and fidelity insurance cover to the extent set out in its Schedule.

Points to note:

• Paragraph 2 says the Schedule applies only to providers and not to representatives.
• Paragraph 3 sets out the cover required by category of provider, and distinguishes providers who receive or hold clients' financial products or funds from those who do not. The amounts are in the notice and may have been adjusted since; check the current figure with the Financial Sector Conduct Authority (FSCA) rather than rely on a guide.
• Paragraph 4 says a person licensed after the commencement date must comply within 6 weeks of authorisation.
• Paragraph 5 allows the Registrar to amend or adjust the Schedule by notice in the Gazette.

Exemptions from the cover requirements may exist for some categories of providers, so the answer for a particular provider depends on its category and on whether an exemption applies. Confirm it with the FSCA or the provider's compliance officer.

What about property practitioners?

Section 57 of the Property Practitioners Act 22 of 2019 is headed "Mandatory indemnity insurance". It allows the Minister to prescribe indemnity insurance which a property practitioner must take out and maintain, for the purposes of providing redress for contraventions of a code of conduct or for sanctionable conduct. The Minister may differentiate between categories of property practitioners, the minimum insured amounts, the extent to which conduct qualifies for redress, and the maximum amounts payable.

The section is an enabling power. It tells you the Minister may prescribe; it does not by itself say what a given practitioner must hold today. Ask the Property Practitioners Regulatory Authority what applies to you.

What about engineers, architects, accountants and others?

This guide does not state a requirement for other professions because none was verified against a primary source. If you belong to a professional body, find its current rules or code of conduct and look for the words "indemnity" or "insurance". If the body's website lists a requirement, copy the rule number and the date. If it does not, ask the body in writing.

How do client contracts ask for it?

Contracts usually put the requirement in a clause that names the kind of cover, a minimum limit, the period for which it must run and sometimes a party to be noted on the policy. They may also ask for a certificate before work begins, or for the cover to continue for a period after the work ends.

Read the clause for these details:

• the exact kind of cover named (professional indemnity, professional liability, public liability or "liability insurance");
• the limit, and whether it applies per claim or in total;
• how long the cover must stay in force, including after the project ends;
• whether the cover must be on a particular basis, such as claims-made, which affects what happens after the policy ends (see what professional liability cover pays for); and
• what proof they want and when.

Give the clause to the licensed provider who calls you. Olvian does not say what limit a contract needs. The provider and the other party to the contract settle that.

What do I do if I have been asked for proof and have none?

Say so, and do not backdate anything. Cover starts when the provider confirms it, not before. Ask the provider when cover begins and for written confirmation of the start date, and tell the other party the true position. If there is a deadline in the contract, tell the provider on the first call so it can be taken into account. The Rules help here in one respect: Rule 4.2 of the Policyholder Protection Rules (Short-term Insurance), 2017 gives a cooling-off right of 14 days from receiving the policy contract for a new policy with a term longer than 31 days, where no benefit has been paid or claimed and the insured event has not occurred.

What should I check before I rely on any of this?

Rules change, and exemptions come and go. Before you rely on a requirement, check four things and write the answers down:

1. The instrument. The exact name, number and date of the rule, notice or Act section.
2. Whether it applies to you. The category, the licence or the role the rule is aimed at. The FAIS notice, for example, applies to providers and not to representatives.
3. What is current. Whether the figure has been amended or an exemption issued. The FAIS notice itself says the Registrar may amend it by Gazette notice.
4. What proof is required. Who must see the evidence of cover and when.

If you cannot find a rule, say so to the person asking, and ask them to point to the clause or rule they rely on. That is a fair request from a business to anyone who says cover is required.

How does Olvian fit in?

Olvian is a lead-referral service. You ask once, and the request goes to licensed providers who pay Olvian a fee and call you back. Olvian is not an insurer, broker or adviser. It does not decide whether a rule or contract requires cover of you, or what limit is right.

Sources

Checked on 31 October 2026. This guide is information, not advice.

• Board Notice 123 of 2009: Requirements for Professional Indemnity and Fidelity Insurance Cover for Providers, 2009 (FAIS)
• Board Notice 123 of 2009, paragraph 2: Application
• Board Notice 123 of 2009, paragraph 3: categories of provider, paragraph 4: time of licensing and paragraph 5: amendments and adjustments
• Property Practitioners Act 22 of 2019, section 57: Mandatory indemnity insurance
• Policyholder Protection Rules (Short-term Insurance), 2017, Rule 4: Cooling-off rights