Professional Indemnity Insurance
Professional indemnity insurance plays an integral role in the protection of your accounting practice and livelihood. As an accountant, offering financial advice and services on a daily basis can expose even the most experienced professional to the risk of a negligence or a breach of duty claim. If this happens, professional indemnity can help protect a business against allegations of incorrect advice, breach of professional duty or negligence from a third party (usually a client).
Members of Chartered Accountants ANZ, CPA Australia or the Institute of Public Accountants must arrange professional indemnity insurance that meets the requirements set by each institution.
At Marsh, we offer professional indemnity insurance that can help to protect you and your business.
Mistakes that may expose accountants to lawsuits or allegations can arise in many ways, including:
- Inaccurate data entry, omissions or incorrect reporting
- Late filing of returns
- Failure to fully comply with audit requirements
- Negligence in giving advice or providing services
Contact Marsh to arrange a professional indemnity quote for your accounting practice.
Public Liability Insurance
Another cover for accountants to consider is public liability insurance. If you interact with the public while running your business, there is always a risk that an accident could happen. This type of insurance can help protect you against financial losses if a third party claims that they’ve sustained an injury, or that their property was damaged, due to your negligent business activities. The subsequent costs of legal proceedings can also add up regardless of whether you are at fault.
As a detail-oriented professional, taking this seemingly small step in obtaining adequate insurance cover can lead to a big sigh of relief if an incident occurs, and can reduce the overall risks in your practice.
Also, if you are seeking the use of an office space, it is common for property owners to first require a copy of your public liability cover before accepting your request for use or lease of the venue.
15 years of experience servicing accountants
With over 15 year’s industry experience, our team are committed to delivering quality service and keeping accountants informed of the latest practices and regulations affecting the industry as a whole.
Insurance cover that meets professional indemnity accounting requirements
We can help accountants arrange an insurance policy that meets the minimum requirements specified by your accounting governing body or association.
Ongoing broker expertise, support and advocacy
We work with accountants, of all sizes and scope to arrange insurance that meets the risk exposures of the financial industry. Our team also act on behalf of clients to provide advocacy support in the event of a claim.
Understanding your industry association insurance requirements
Most Australian accounting associations require accountants to have a specific level of professional indemnity insurance before accepting or renewing their membership. These requirements can differ based on the association, the specific account services you offer and fee structure you provide.
We strongly advise that accountants head to their respective industry association website and thoroughly review the insurance requirements before arranging professional indemnity cover.
Helpful association links:
- CPA Australia - CPA Australia Professional Indemnity Insurance Guide
- Chartered Accountants ANZ - Access further information on Chartered Accounts ANZ Australia Regulations webpage
- Institute of Public Accountants (IPA) - IPA Professional Indemnity Insurance requirements
- Tax Practitioners Board - https://www.tpb.gov.au/pi-insurance-board-requirements
Frequently asked questions
What are the risks my business may face as an accountant?
While the risk exposures of each business can differ based a variety of factors, some known and emerging exposures faced by accountants include:
- Negligent or breach of duty allegations from disgruntled customers
- Injury or property damage claims from a third party
- Property damage due to natural disaster
- Cyber-attacks if customer or business data is stored by a third party provider, including accounting software and tool
What does ‘claims made’ mean?
Claims Made is a term used to describe an insurance policy that covers claims which are notified during the policy term. This may not necessarily be the same period in which the accused incident or error resulting in the claim occurred.
Professional indemnity policies provide a 'claims made' basis of cover because advice or service errors in many professions are often discovered weeks, months or even years after the mistake was made.
For example, if an accountant made a service or advice error for a client in 2016, but the client did not discover their loss until 2021, the accused accountant 2021 policy would be the correct policy to respond to any resulting claim. Therefore, a professional indemnity policy or 'run-off' policy must be in place for a claim to be met by an insurer.
It’s also important to note that, if the limit of indemnity was changed, it is the limit purchased when the claim is notified that applies, not the limit purchased when the work was completed.
*Please refer to the Tax Practitioners Board’s Explanatory Paper TPB (EP) 03/2010 ‘Professional Indemnity Insurance’ for full details. It is your responsibility to assess whether a professional indemnity insurance policy is adequate for your business and risks in accordance with the Tax Practitioners Board’s requirements.
When arranging Professional Indemnity Insurance, Marsh Advantage Insurance act under a binding authority on behalf of AAI Limited (ABN 48 005 297 807, AFSL 230859).
Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“MAI”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) which is a related entity of MAI. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. 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 available from Marsh Advantage Insurance on request.