Professional indemnity insurance - Victorian Legal Services Board + Commissioner

Professional indemnity insurance

On this page you can find information on professional indemnity insurance relevant to the below types of legal practice.

Australian Legal Practitioners

The Legal Profession Uniform Law (Victoria) requires all legal practitioners to hold, or be covered by professional indemnity insurance before engaging in legal practice in Victoria. This insurance must be maintained at all times while engaged in legal practice in Victoria.

The insurance must be an approved insurance policy covering the civil liability of the law practice and each former or current principal and employee, in connection with the practice’s legal practice and its administration of trusts in Victoria.

Section 102 of the Legal Profession Uniform Law Application Act 2014 (Vic) maintains the Legal Practitioners’ Liability Committee’s statutory role in providing professional indemnity insurance in Victoria.

Community legal services

The Uniform Law requires that a community legal service (CLS) be insured for any legal services provided. Where the CLS is a corporation, it must hold an approved insurance policy and that policy must cover the CLS itself and each of the Australian legal practitioners carrying out work at the CLS. Where the CLS is not a corporation it must not engage in legal practice unless each Australian legal practitioner who engages in legal practice for or on behalf of the CLS holds or is covered by an approved insurance policy and the policy covers that practice.

The insurance must be obtained before the service commences to engage in legal practice in this jurisdiction.

A CLS that holds, or proposes to hold, professional indemnity insurance under a policy other than the approved National Association of Community Legal Centres and Victorian Managed Insurance Authority policies, must apply to the Board for approval of the policy terms and conditions, prior to commencing legal practice in Victoria. Applications for approval must include a copy of the policy (wording and schedule/certificate of currency) and product disclosure statement.

The Board may exempt a CLS from compliance with professional indemnity insurance requirements in accordance with Rule 82(1)(d) of the Legal Profession Uniform General Rules 2015 (see below for further information).

Australian-registered foreign lawyers

The Uniform Law does not require Australian-registered foreign lawyers to hold professional indemnity insurance (s214 Uniform Law). However, if an Australian-registered foreign lawyer does not hold an approved insurance policy, they must provide a written disclosure statement to each client before, or as soon as practicable after, being retained for legal services in this jurisdiction stating:

  • whether or not the lawyer is covered by other professional indemnity insurance; and
  • if covered, the nature and extent of that insurance.

Failure to give notice of the above matters renders the foreign lawyer liable to civil pecuniary penalty.

For more information on practising as a foreign lawyer, see the Foreign Lawyers page.

Corporate and government lawyers

The Uniform Law does not generally impose obligations on corporate or government lawyers to maintain insurance. However, those wishing to provide pro bono legal services outside of a community legal service must be covered by insurance.

For more information on approved insurance policies, please contact the National Pro Bono Resource Centre.

Exemption from professional indemnity insurance requirements

Section 215 of the Uniform Law provides for exemptions from the requirement to hold professional indemnity insurance in Victoria. Most commonly, a practitioner or ILP may be exempt from the requirement to hold a policy in this jurisdiction if that practitioner or ILP holds an approved policy in another jurisdiction that covers the legal practice of that person in Victoria. Please see sections 215 and 216 together with Rule 82 of the Uniform Rules which detail how exemptions may apply.

Applications to the Board for an exemption from professional indemnity insurance requirements must:

  • be in writing
  • specify the sub-section of section 215 under which the law practice seeks an exemption, and
  • set out the law practice’s grounds for exemption, in light of the legislation and relevant Board policy.

For more information on professional indemnity insurance exemptions, see the Board’s Exemptions Policy – Professional Indemnity Insurance (140KB PDF).

Last modified December 21, 2016.