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CONVEYANCERS in Australia’s largest state are feeling the impacts of rising professional indemnity insurance costs, prompting some to consider exiting the industry.
That’s the message from Sydney property lawyer Nour Salama, principal of Salbridge Lawyers, a firm that specialises in property and leasing, including conveyancing services.
Salama says there’s been a big lift in PII costs in recent times, attributing it to a lift in risk flowing from things such as cyber threats, potential non-compliance with new anti-money laundering laws, and strict regulatory oversight on recent surcharge purchaser duty rules.
The rising cost of PII is a popular topic online among NSW conveyancers, she says. “Every second post is a complaint about all the fees going up,” she says.
“I practice in other areas of law but for conveyancers who practice exclusively in that, it’s becoming not even worth it sometimes.
“It’s definitely been a lot more of an issue in recent times, maybe more with cybersecurity and the cyber threats and all these new compliance issues that have been raised recently,” Salama says, pointing to the country’s recent “tranche 2” reforms.
The recent overhaul expanded the country’s anti-money laundering and counter terrorism financing (AML/CTF) system to “high-risk services” provided by real estate professionals like conveyancers. AUSTRAC has warned conveyancers to comply with the tough new laws, warning it aims to pursue businesses that breach the rules, legislated this year.
On cyber risks, she says conveyancers are prime targets of cybercriminals given the “very high value transactions” handled by the profession, contributing to PII premiums going up.
“I’ve seen it first-hand,” she says, recalling an instance where a client received a “purported email from me saying to transfer the purchase balance” to an unknown account.
“The client said, ‘You’ve already given me your account details. Why are you sending them to me again?’ and forwarded me the email and I said, ‘This wasn’t from me’. It happens a lot.”
AIC NSW CEO Chris Tyler echoes the property lawyer’s comments, saying insurance costs have risen sharply in the past few years, hitting small firms especially hard.
“Any increase in cost puts small business operators under pressure,” Tyler says, blaming foreign resident surcharge purchaser duty claims for the uplift.
“You need to increase your fees, focus on process and procedures and risk management to minimise any claims or potential exposure to claims,” he advises NSW conveyancers.
He also wants action from state authorities on the issue, urging them to review and redesign their processes to redirect risk to the taxpayer.
“Too often insurance claims are being experienced on transactions which are more than five years old,” he says.
“Revenue NSW has the capacity to conduct compliance audits on those and when these audits disclose incorrect assessments the taxpayer is directed to the conveyancer to make a claim.”
Tyler disputes the merits of Revenue NSW chasing up old claims. “The claims incur significant dollar penalties and extraordinary amounts of interest – 11.78% accruing daily – considering they are for transactions that are many years past,” he says.
“Prior to electronic conveyancing these errors were incurred within RNSW offices and were not a drain on the Professional Indemnity Insurance master scheme,” he adds.
By contrast, AIC Victoria CEO Shakila Maclean paints a positive picture in her state. She says some PII costs remain steady while others have fallen in Victoria for 2025/26.
The upbeat result follows much “time and effort into delivering a tailored, risk-management-focused CPD program for our members”, Maclean says.
“The results are clear: we’re seeing a real shift towards a less claims-based approach, showing the program’s impact on both professional standards and better outcomes for consumers,” she says.
“This shows the program’s impact in strengthening professional standards and improving consumer protection, while also reducing costs and risks across the industry.
“Participation in CPD has grown year-on-year, with more members embedding risk-aware processes into everyday practice.”
Katy Send, of Melbourne-based Anchor Conveyancing, says PII is a significant cost burden on the conveyancing firm and one of its largest expense items.
But after steep increases in premiums in the years after the state implemented electronic settlements, Send says it’s pleasing to see premiums headed lower in the state.
In the conveyancer’s opinion, greater reliance on technology has come with increased industry risk, putting upward pressure on PII in the recent past.
“Modern tech made life much easier. For example, electronic settlement is a lot easier to process than a paper settlement. But at the same time, we have put our property industry at significant risk,” she says.
“When government went ahead with introducing electronic settlements it did not account that our banking industry lags behind other countries without a system in place to verify that the name of the money transfer recipient matches their bank account number.”
As Send sees it, the issue of PII premiums ranks as an industry pressure point beneath low quality practitioners pushing fees down, compliance costs and cybersecurity costs. “Premiums will be growing and there is not much extra we can do about it apart from constantly being alert about threats,” she says.
Further north, the Queensland Law Society says its jurisdiction, like Victoria, is not experiencing the same issues as NSW when it comes to PII.
It says in Queensland, where only legal practices do conveyancing and are insured by the QLS-owned Lecon, premiums have “been going down year on year for the past four to five years”.
“There’s no solvency issues in the scheme and little exposure to the volatility of the market,” a spokesperson says.
Nationwide, professional indemnity insurance products have seen similar premium trends to public liability in recent years, according to analysis by the Australian Prudential Regulation Authority, which says the average PII premium has surged by 27% since 2015.
APRA says the increase in average premium is significant for micro businesses at 85%, low for small and medium-sized businesses at up to 10%, and “significant” for large and corporates at 70-160%. “This indicates that insurance affordability has reduced most for micro and large/corporate businesses,” the agency says.
Twane Wessels, from Bond University’s business school, says in circumstances where PII premiums are going up fast, it’s unlikely to be the result of profiteering by insurers.
“I think that the principles still remain that if we’re seeing increases above what we expect to be normal it’s because of more risks that they are trying to price for,” Wessels says.
“Often people become a little bit angry at insurance companies because they think their premiums are going up because of the profit loading but it’s necessary to understand the foundation of where those pricing increases come from and it’s not necessarily profit.”
She says Australia has “quite a competitive market” for insurance, which should help keep a lid on PII premiums.
It’s also in an insurer’s interest to keep policy holders signed up, she says.
“For an insurance company the bigger your pool of policy holders is the more competitively you can price actually, so they would want to hold on to all their clients that they possibly can so they can still have those economies of scale.”
§ Soaring insurance costs hitting NSW conveyancers hard
By Lewis Panther
Additional loading fees for some conveyancers mean their business is not viable, says leading practitioner
CONVEYANCERS are facing additional loading to their insurance premiums - with some being hit with increases of 370 per cent. That’s the burden a number of businesses are handling because of the new loading system introduced by their insurer and because of penalties levied by Revenue New South Wales against their clients
Many have had to make claims because of renewed assessments of the Revenue NSW Surcharge Purchaser Duty – as clients have been hit by backdated demands for payment.
The stark reality is that those businesses with massive insurance premiums may not be viable, Your Move Conveyancing owner David Winning tells the Australian Conveyancer.
Winning said the problems started with Revenue NSW’s surcharge purchaser duty regime in 2016.
“The surcharge purchaser duty regime was introduced by Revenue NSW to find out about foreign ownership of real estate in Australia,” he said.
“The Federal Government didn’t know who was buying property – and the States didn’t know either. It required the practitioner to collect that information off the consumer in a declaration form.”
A surcharge on the purchase price was introduced, which now sits at 9 per cent of the purchase price, along with the new process, much to the well-documented annoyance of many conveyancers.
“It required almost overnight learning,” Winning said, explaining that under the new rules conveyancers had to collate data from clients to show they were resident in Australia long enough to avoid the surcharge.
“To determine whether they were ordinarily resident. If they weren’t, then this surcharge would apply. It became very – well, it is still – quite confusing.”
The problems became evident when Revenue NSW began auditing.
“Fast forward a couple of years later and Revenue NSW went on a massive audit which shook the whole legal and conveyancing industries,” said Winning.
“They reissued a whole heap of assessment notices directly.
“Over the past five years, about 45 per cent of the claims made on the Policy were attributed to Surcharge claims.”
§ Knock-on effect for insurance premiums
With insurance soaring - up 20 per cent and even 40 per cent for some – Winning questions the viability of those hit with additional sky-high loading for making claims over the past nine years.
“How much of a loading depends on the severity of the claim and how frequent your claims were,” he explained.
“The claims loading itself can go up to 420 per cent. You basically become uninsurable at a certain point.
“Once you get into those higher level categories, you’ve got to be questioning your ability to provide quality conveyancing services, let alone the financial burden and viability of running a successful practice.”
Of the 500 conveyancing businesses in NSW, 30 per cent had an increased loading on their insurance premium.
§ UNOFFICIAL TAX COLLECTORS FOR REVENUE NSW
AS other conveyancers and industry leaders have told the Australian Conveyancer, acting as a quasi-tax collector is one of their big bugbears.
“It’s unfortunate that a large part of a conveyancer’s role is broadly compliance,” says Your Move Conveyancing owner Dave Winning Dave Winning.
“It’s not adding any value to the customer. We’re more or less pinned into somewhat being the bearer of bad news for our clients.
“About 25 per cent of the overall conveyancing transaction is spent on compliance – and that’s conservative.
“We have plenty of clients who we’ll spend over an hour talking through a declaration form that might be quite complex.
“We are the collectors of a large pool of revenue for the state and constantly threatened with these audits.
“This compliance burden means we’re the unofficial information and tax collector for several tiers of government and departments.”