Your PI Insurance Renewal Is Not a Calendar Reminder — It Is a Business Continuity Event

A practice principal in Perth called me on a Friday afternoon last year. His PI insurance had expired three days earlier, and he had just discovered it while preparing for an AFSL audit. His broker had sent the renewal paperwork to an old email address. The calendar reminder he’d set was on his personal phone, which he’d replaced two months prior. Nobody else in the practice knew the renewal date.

For three days, his four-adviser practice had been providing financial advice without valid professional indemnity coverage. Every Statement of Advice issued during that window, every client meeting conducted, every investment recommendation made — all of it was uninsured. If any of those clients lodged a complaint that resulted in a claim during that 72-hour gap, the advisers would be personally liable.

The reinstatement cost him a 35% late-renewal surcharge on a $28,000 annual premium. That’s $9,800 in avoidable cost — because a renewal reminder was stored in one person’s head and one person’s phone.

The Real Cost of Getting This Wrong

Professional indemnity insurance is not optional for financial planners. It is a condition of your AFSL. Without it, you cannot legally provide financial advice. Yet the renewal process at most practices is shockingly informal — a calendar entry, a mental note, maybe a sticky note on someone’s monitor.

The consequences of mismanaging PI renewal extend well beyond the premium surcharge:

Practice suspension risk. If your AFSL holder discovers a lapse, they may require you to cease advising until coverage is reinstated. For employed advisers under a licensee, the licensee may suspend your authorisation.

Retroactive exposure. PI policies are typically written on a “claims made” basis. If there’s a gap in coverage, claims that arise from advice given during the gap period may not be covered — even if you reinstate the policy the next day.

Regulatory reporting. AFSL holders are required to notify ASIC of any breach of their licence conditions. A PI insurance lapse is a reportable breach. That notification sits on your ASIC record permanently.

Why Manual Tracking Fails

The renewal process for PI insurance is deceptively simple — in theory. You know the expiration date a year in advance. You know your broker’s contact details. You know what information they’ll need. It should be the easiest deadline in your practice to manage.

In practice, it fails for three predictable reasons:

Single point of failure. The renewal date lives in one person’s calendar or memory. When that person is on leave, changes roles, or simply forgets, nobody else picks it up. Unlike client-facing deadlines that multiple people track, PI renewal is typically a principal-only responsibility with zero redundancy.

Broker coordination complexity. A proper PI renewal isn’t a one-email transaction. Your broker needs updated practice information — current funds under advice, number of authorised representatives, complaint and claims history, any new service lines or product types, changes in business structure. Gathering this information takes time, and the broker needs it weeks before expiration to shop the market effectively.

Competing priorities. PI renewal comes once a year. It’s easy to deprioritise against the daily demands of client meetings, compliance obligations, and business development. By the time you focus on it, you’re often inside the 30-day window where your options are limited and your leverage with insurers is weak.

The 90-Day Renewal Process

The practices that handle PI renewal well don’t treat it as a single event. They treat it as a 90-day process with distinct phases:

Days 90-60: Preparation Phase

At 90 days before expiration, the practice compiles its renewal information package. This includes current funds under advice, number of advisers on the register, complaint and claims history for the past 12 months, any material changes to the practice (new service lines, acquisition of another practice, change of licensee), and revenue figures.

This preparation phase is where most of the value lies. When your broker receives a complete, well-organised information package three months out, they have time to approach multiple insurers, negotiate terms, and identify potential premium reductions. When they receive a panicked email two weeks before expiration, they’re binding whatever they can get.

Days 60-30: Market Review Phase

Your broker shops the market. They come back with quotes, coverage comparisons, and recommendations. You review whether your current coverage limits are still adequate — a practice that grew from $80 million to $140 million in FUA over the past year may need to increase its coverage limit, which affects pricing.

This is also when you review your excess structure. A higher excess reduces premium but increases out-of-pocket exposure on claims. The right balance depends on your practice’s risk profile and cash reserves.

Days 30-0: Binding Phase

With quotes evaluated and a decision made, the final phase is executing the binding. This should be completed no later than 14 days before expiration to allow for any administrative delays, payment processing, or last-minute coverage amendments.

The Coverage Adequacy Question

One aspect of PI renewal that practices consistently underestimate is coverage adequacy review. Your practice’s risk profile changes year to year, and your coverage should change with it.

Common triggers that require coverage reassessment:

• FUA growth. A practice managing $200 million in client funds has a materially different risk profile than one managing $80 million. Coverage limits that were adequate two years ago may be insufficient today.
• New advisers. Each additional authorised representative increases the practice’s aggregate risk exposure. Adding two advisers without adjusting coverage is a gap waiting to become a problem.
• New service lines. If your practice expanded from personal financial advice into SMSF administration or aged care financial planning, the risk profile has changed and the insurer needs to know.
• Regulatory changes. Changes in compensation frameworks, disclosure requirements, or complaint handling processes can all affect coverage terms.

The practices that get the best outcomes from their PI insurance treat it as an active risk management tool, not a compliance checkbox. They review coverage quarterly, not annually. They maintain an ongoing relationship with their broker, not a once-a-year transaction. And they document everything — because the insurer that sees a practice with systematic risk management processes is the insurer that offers the most competitive premium.

Your PI insurance is the safety net that protects everything you’ve built. Treat the renewal process with the same rigour you’d apply to managing a client’s retirement portfolio — because the consequences of getting it wrong are just as severe.