Yes, in some states, PI insurance is mandatory for licensing. Requirements vary, so it’s important to check what applies in your location.
2025 insurance market update for residential and commercial real estate agencies
For real estate agencies, staying on top of risk is part of running a professional business. But when it comes to insurance, many agents still ask: what’s the difference between professional indemnity (PI) and public liability (PL) insurance? Both play an important role, but they protect against very different risks.
Understanding how they work, how the insurance market is shifting and what to look out for at renewal can make a big difference to your bottom line while ensuring your business is adequately protected.
Insurance market changes influencing real estate agencies cover
In the first half of 2025, Australian professional indemnity insurance for real estate agents has become more stable, with premiums staying the same or decreasing due to increased competition between insurers.
However, for commercial real estate agents, activities such as managing shopping centres and large commercial assets, as well as off-the-plan sales can still attract higher premiums mainly because these activities have historically experienced significant losses, producing higher frequency and severity of claims.
Professional indemnity insurance trends
The Australian PI insurance market has experienced a notable shift in the first half of 2025. Premium rates across the real estate sector began to stabilise, and in some cases, are even reducing. This positive trend is largely due to additional capacity coming into the local insurance market, which has increased competition between insurers and expanded the availability of coverage for professionals, including real estate agents.
Specifically, insurers’ appetite to underwrite real estate professional indemnity insurance has grown, which has led to a more competitive environment and helped to moderate premium costs for insureds.
Despite this overall market stabilisation, certain high-risk activities within the real estate sector continue to attract higher premiums. Insurers are still cautious around real estate business activities with higher risk profiles due to the potential for substantial claims, such as commercial property management and off-the-plan sales.
Conversely, for more traditional activities such as residential property sales and property management, premiums have remained relatively stable as these segments continue to be viewed as less risky by insurers. Insurers are offering more consistent premium rates, which has provided a level of reassurance and predictability for budgeting purposes for real estate businesses.
Factors impacting professional indemnity insurance premiums for real estate agents
When it comes to premium rates, it can vary among businesses. There are three main factors that can impact individual premiums:
- Turnover: An increase in your business turnover from the previous year generally means your premium will also likely increase. This is because a higher turnover indicates more activities and transactions, which increases your exposure to potential claims. It is important to accurately declare your turnover values to properly reflect the level of risk for insurers. Inaccurate or dishonest declarations can result in cancellation of your insurance policy or your claims being declined, leaving your business unprotected.
- Business activity mix: A change in the nature of your activities can significantly impact your premium. For example, if your business shifts towards a higher proportion of commercial property management—considered a high-risk activity—your premium will likely increase. Conversely, a focus on lower-risk activities such as residential sales may help maintain or even reduce your premium at renewal time.
- Claims history: Your claims history over the past five to ten years plays a crucial role in pricing. If you have experienced claims during this period or currently have an open claim, it could impact your renewal premium. Insurers use claims history as an indicator for level of risk exposure, which is then factored into the pricing of an insurance policy.
Underwriting trends: Insurers focusing on internal controls and claims
Cyber insurance for real estate agencies: Staying protected in a growing threat landscape.
Cyber insurance remains essential for real estate agencies due to rising cyber-attacks. The good news is cyber insurance premiums are decreasing, making it a good time for you to consider purchasing cyber insurance to safeguard your business against potential exposures.
Cyber insurance for real estate agencies remains a critical component of risk management amid a rising trend in cyber breaches and an increase in reported claims in recent years. The real estate sector is particularly vulnerable to cyber-attacks due to frequent involvement in high-value transactions and the extensive storage of personal data, often without the advanced cybersecurity measures that larger organisations typically would invest in. This makes real estate agencies attractive targets for cybercriminals, where attacks can potentially cause severe and lasting damage to smaller businesses.
Franchise groups pose challenges for cyber insurers
Similar to recent developments in the professional indemnity insurance market, both local and global cyber markets have experienced a continued reduction of premiums in the first half of 2025. However, franchise groups with interconnected software solutions continue to pose significant challenges for insurers. Risk assessment and coverage for franchise groups remain ongoing and complex.
Top 3 renewal tips for real estate agencies
If your insurance renewal is due soon, a little preparation goes a long way and can help your achieve a better outcome. Here our top three renewal tips:
Key takeaways
- Market conditions are currently more favourable for insurance buyers, with PI premiums on a downward trend and cyber insurer competition returning to the market.
- Real estate agencies that invest in strong governance and risk controls are more likely to secure better pricing and coverage terms.
- Early engagement, clear documentation and a good renewal strategy can help you take advantage of current market conditions.
Looking ahead
Although the insurance market is softening and conditions are improving, underwriting discipline is still being applied by insurers. Real estate agencies should take advantage of current market competition to strengthen their cover to be better protected. It is important not to cut corners. Now is the perfect time to review both your PI and PL cover to ensure your insurance policies are keeping pace with the risks you face as your business grows or changes.
Are you looking for the right balance between professional indemnity and public liability cover for your agency?
At Marsh, we provide risk management and insurance broking services in real estate with over 1,500 clients in Australia. Let us help you to understand the level of cover your business needs.
Find out more about insurance solutions for real estate agencies arranged by Marsh.
Have questions?
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Frequently asked questions
PI protects you in the event a client alleges you’ve made a professional mistake (e.g. give incorrect advice), while PL covers third-party injury or property damage (e.g. someone falls over at an open home inspection).
New insurers entering into the market has increased competition, especially for lower-risk agencies. This has helped to drive pricing down.
When insurers are keen to underwrite real estate risks, competition rises. This can mean better pricing and broader cover availability for agencies.
A clean claims record makes you more attractive to insurers, helping to keep insurance costs stable. Frequent or open claims will likely increase your premium.
For PI, insurers typically assess your business activities and governance. For PL, the focus is typically on exposure to injury or property damage claims.
Start early, present a clear risk story, review limits and be upfront about claims. These steps can improve your negotiating position and help you achieve better insurance results.
Yes, many agencies purchase them together as a package policy. While they cover different risks, holding both ensures broader protection across professional services and day-to-day business activities.
This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change.
This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances.
Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238 983) (“Marsh”) and Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238 369) (“MAI”) arrange the general insurance (i.e. not the Discretionary Trust Arrangement) and are not the insurer.
Discretionary Trust Arrangements are issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417 964) (“JGS”). Any advice or dealing in relation to a Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). The cover provided by a Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.
For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements (PDSs) available from the relevant product issuer. Target Market Determinations (TMDs) are available here.
LCPA 25/676