Contents

Key Takeaways:

  • If your occupation doesn’t fit a standard insurer category, you can end up massively over-quoted for professional indemnity insurance
  • The difference between an $18,000 quote and a sub-$3,000 placement can come down to how your risk is presented to the underwriter
  • A specialist broker who understands your actual activities (not just your job title) can save you thousands

You’ve spent decades in your industry. You know the work inside out. You’re finally launching your own business. And then you try to get professional indemnity insurance and the first quote comes back at close to $18,000.

That’s what happened to a client who came to us recently. Not because his business was high-risk. But because no one could figure out where to put him.

This is what we call a grey-zone occupation. And if you’re in one, here’s what you need to know.

What is a grey-zone occupation in insurance?

A grey-zone occupation is any role or business activity that doesn’t neatly fit into the standard categories insurers use to assess professional indemnity risk. Think of it as falling between the boxes on the application form rather than ticking one cleanly.

It’s more common than you’d think. We regularly work with professionals who’ve been declined, over-quoted, or just flat-out confused by the PI process because their insurer couldn’t classify what they do.

Financial services is one of the worst for this. Capital raisers, authorised representatives operating under someone else’s AFSL, business introducers, specialist consultants. They’re not fund managers, not financial advisers, not M&A firms. But they still need PI cover, and insurers often default to lumping them into a higher-risk category that doesn’t reflect what they actually do.

How does a misclassified occupation affect your PI premium?

Massively. In the case we mentioned, the client was a sole operator launching a wholesale capital raising business. He’d spent decades in financial services and was partnering with an established firm under their AFSL.

His actual work? Introducing high-net-worth wholesale investors to businesses seeking capital. No financial advice. No funds under management. No contracts with investors. Just introductions and mandated agreements with the businesses.

But when the first insurer looked at it, they saw “financial services” and “capital raising” and quoted close to $18,000.

Jack O’Hagan, our broker handling the placement, knew that quote didn’t reflect the actual risk. So he picked up the phone and called the underwriter directly to walk them through what this client actually does day to day. Not managing funds. Not giving advice. Introducing parties and facilitating deals.

“It comes down to relationships,” Jack says. “With clients, so you understand the risk properly. And with underwriters, so you can reframe it and negotiate on your client’s behalf. Without both, you’re just submitting forms and hoping for the best.”

The result? A different insurer placed the policy for under $3,000. Same business, same activities, same person. Roughly an 80% saving, because the risk was presented accurately to an underwriter who understood it.

What should you do if you’ve been declined or over-quoted for PI?

If you’ve been knocked back or hit with a premium that feels way too high, there are a few things worth doing before you panic.

Don’t assume the first quote is the right one. Insurers work from classification systems, and those systems aren’t perfect. If your occupation doesn’t fit neatly, the default is usually to price it conservatively (ie, expensively).

Get clear on what you actually do. Sounds obvious, but it matters more than you’d think. The client in this case had drafted his own engagement letter using ChatGPT. It wasn’t quite right, and those kinds of documents feed directly into how underwriters assess your risk. Clean paperwork before you approach the market makes a real difference.

Use a broker who’ll advocate for you. This is where the real value is. A specialist broker doesn’t just submit your application and wait. They call underwriters. They explain the nuance. They reframe the risk so it’s assessed on what you actually do, not what your job title sounds like.

Tank Insurance places PI cover across a wide range of industries and occupations. A significant chunk of our work is clients who’ve been knocked back or over-quoted elsewhere. Not unusual at all. It’s actually one of the main reasons people come to us.

Frequently Asked Questions

Do I need PI insurance if I’m operating under someone else’s AFSL?

Usually, yes. Even if the AFSL holder has their own PI cover, it may not extend to your activities as an authorised representative. It’s worth checking the terms of your authorisation and considering your own policy to avoid gaps.

Why do different insurers quote such different amounts for the same risk?

Because they classify occupations differently and have different appetites for different types of risk. One insurer might see “capital raising” and think fund management. Another might understand the difference between introducing parties and managing money. The way the risk is presented matters enormously.

Can I get PI insurance before my business is officially set up?

Yes, in many cases. The client in this story hadn’t even registered an ABN yet. Insurers can assess and quote on a pre-inception basis, though you’ll typically need to provide details about your planned activities, revenue projections, and any relevant experience.

Is it worth paying more for a broker instead of going direct?

When your occupation is straightforward, going direct can work fine. But when your risk sits in a grey zone (and you might not even realise it does), a broker who understands how to present your activities to the right underwriter can save you thousands. In this case, roughly $15,000.

Getting the right cover

If your occupation doesn’t fit a neat category, that doesn’t mean you can’t get properly covered at a fair price. You just need someone in your corner who knows which markets to approach and how to frame the conversation.

Ready to explore your options? Tank Insurance specialises in professional indemnity placements for non-standard and hard-to-place occupations. Get in touch at 02 9000 1155 or [email protected] to talk through your situation. No obligation. No generic quotes.

This is general information only. It does not take your objectives, financial situation, or needs into account. Always read the relevant Product Disclosure Statement (PDS) and seek independent advice before making insurance decisions.

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