PI for managed service providers is arranged by a broker, because insurers want to understand your client access, service levels and backups first.
Source: https://piinsurance.com.au/managed-service-providers/, fetched from the preview https://pi-react-4ee768.pages.dev/managed-service-providers/ on 10 Nov 2026; site dated 3 Nov 2026. Preview wording, not yet broker-reviewed. General information, not advice.
Site label: Usually asked for in client contracts.
Why you need it: your clients
Clients ask for PI in managed services agreements, usually with cyber cover, because you have access to their systems every day. If you also work on site, they often ask for public liability as well.
Typical limits
$2m to $5m, usually with cyber. Larger clients and government contracts can ask for more.
Insurers look closely at this work, so a broker arranges it with you directly. That usually means a better fit, not a harder time.
Work that gets a closer look
- Why MSPs get a closer look. MSPs were once seen as lower risk. That has changed over the last several years, because you work for many customers and one problem can spread across all of them.
- Hosting and backups. If you host or back up client data, insurers look at your backup and disaster recovery, and where the data is held.
Cover gaps to know about
- Data breaches and security incidents are now mostly a matter for a cyber policy, not PI. Ask about cyber cover alongside.
What can go wrong
Illustrative scenarios, not real claims.
An update that took several clients offline
An update pushed through your remote management tool crashes servers at several clients. Each one claims lost trading.
Backups that had stopped
A client's server fails and the backups you manage turn out to have stopped months ago. The client claims the cost of rebuilding its data.
Common exclusions to watch
- Service credits you agreed to in the contract
- Attacks on your own systems (that is cyber cover)
- Failure of power, internet or a cloud provider
- Hardware faults and warranty claims
Wording differs between policies. Read the policy wording, or ask us to point out what it says.
Common questions
Do managed service providers (MSPs) need professional indemnity insurance?
Clients ask for PI in managed services agreements, usually with cyber cover, because you have access to their systems every day. If you also work on site, they often ask for public liability as well.
How much PI cover do managed service providers (MSPs) need?
$2m to $5m, usually with cyber. Larger clients and government contracts can ask for more.