Sole Trader Developer -Two Declines, Three Renewals

A sole trader software developer based in northern Sydney came to us having never held professional indemnity insurance. With over a decade in the industry, average client contracts running at $50,000 to $100,000, and activities spanning software development, design, database management, and day-to-day operational support, the case for PI cover was clear.

Before reaching us, he had attempted to obtain cover through an online aggregator platform. Two of the major insurers on that platform declined his application on occupation grounds. A third insurer referred the submission rather than quoting directly. None of these outcomes resulted in a policy being placed.

He needed $1 million PI cover and a broker who could actually get to a result.

We assessed the risk profile and went to market through our own channels rather than the same online platforms that had already declined him.

Our approach:

• Specialist underwriter access: We approached Woodina, a specialist underwriting agency with appetite for software and IT consulting risks that generalist platforms often decline
• Direct placement: By going direct to the underwriter rather than through an aggregator, we avoided the margin loading and occupational classification mismatches that had caused the earlier declines
• Revenue-appropriate pricing: With annual revenue of around $110,000, we matched the risk profile accurately and placed the policy at a competitive premium

We placed the policy through Woodina at inception and managed the relationship from there.

The initial placement demonstrated something worth noting about online platforms. Both AIG and Vero declined the application through the aggregator at inception. At the first renewal, both of those same insurers quoted on the same platform at higher prices than we could achieve through our direct channel. Platform outcomes for the same insurer and the same occupation can change year to year, and the initial decline doesn't necessarily reflect what that insurer would do at renewal.

At the third renewal, the developer's revenue had dropped significantly - by close to half. Updating this required us to go direct to the underwriter to resolve manually, rather than through standard renewal channels.

The policy was placed and renewed three consecutive times. Cover was maintained continuously throughout.

A useful benchmark from this engagement: at the first renewal, we compared our direct placement against four options available through a major online aggregator. Our placed premium was competitive with the cheapest aggregator option on price, and that cheapest option came from AIG, the same insurer that had declined the initial application entirely. The direct underwriter relationship and the placement history we had built with Woodina made our channel more reliable, not just competitive on price.

The case also highlights why contract size matters when assessing whether PI is worth the premium. With average client contracts of $50,000 to $100,000, a single professional negligence claim could easily dwarf several years' worth of combined premiums. The risk-to-premium ratio justified cover from the outset.