It doesn’t matter how experienced you are, if you provide professional advice or services it’s important to protect your business against possible claims made against you for malpractice or professional misconduct. Whether you are a sole trader bookkeeper or run a bookkeeping business, all bookkeepers in Australia who are registered as BAS agents are legally required to maintain Professional Indemnity (PI) insurance under the Tax Agent Services Act 2009 (TASA).
We have teamed together with Australia’s leading insurers to provide you multiple quotes instantly, online or over the phone, without the hassle of filling out lengthy paperwork.
Compliant with the Tax Practitioners Board requirements, the coverage for professional indemnity is the most cost effective on the market. Get the right cover at the right place in a matter of minutes!
What is Professional Indemnity (PI) Insurance?
Professional Indemnity insurance, often referred to as PI insurance, protects you and your staff against financial losses for any legal action taken against you or your business for services and/or advice you have provided should you make an error or omission whilst performing your duties as a bookkeeper. It will also cover you for the legal costs of defending such an action which can often run into hundreds of thousands of dollars.
Why do I need PI Insurance?
Not only is it a legal requirement to hold a minimum level of cover as a registered bookkeeper or BAS agent, you should consider the potential risks specific to you and your business. These can include, but are not limited to:
Even a tiny error could cause damage to a client which could not only have huge repercussions on your business, but could also affect your personal assets.
David*, a bookkeeper, was engaged on a contractual basis for bookkeeping services. During that time the firm that he was contracted to install new accounting software which he did not have any background in. Unfortunately he made some errors and omissions which had a financial impact on the contracting firm. The firm sought $25,950 in damages and it was deemed that David was in fact at error. Fortunately for David he held a Professional Indemnity policy and his insurer paid the claim in full.
*Name has been changed to protect privacy
It’s important to take into account your individual requirements set out by the Tax Practitioners Board (TPB) which is based on the annual turnover of your business.
Below is a handy table for you to use as a guide, however it’s important to note that what is an appropriate amount of cover for an agent may in fact be more than what is set as the minimum requirement.
Tier |
Turnover from the provision of BAS services |
Minimum aggregate amount of cover* |
1 |
Up to $75,000 (excluding GST) |
$250,000 cover inclusive of legal and defence costs |
2 |
$75,001 – $500,000 (excluding GST) |
$500,000 cover inclusive of legal and defence costs |
3 |
Over $500,000 (excluding GST) |
$1,000,000 cover inclusive of legal and defence costs |
Failure to maintain the appropriate level of PI insurance that meets the TASA requirements could mean that you will not be meeting your ongoing registration requirements and may be in breach of the Code of Professional Conduct (Code), which can result in termination of registration.
What is covered?Depending on the policy you choose, it could cover you for:
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What’s typically not covered?
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Although Professional Indemnity Insurance is the only type of insurance that is compulsory as a registered Bookkeeper or BAS Agent, you should consider other types of insurance policies you may require to cover yourself from basic business risks. Expect the unexpected!
Whilst you may not need every policy listed below, these are the types of policies our insurance experts can customise for your business.
Public Liability insurance is something that every cautious and responsible business owner should have. Whether you work mainly from your office, or you frequently visit your clients at their premises, the last thing you want to have to think about is paying hefty legal costs should an unwanted accident occur.
Public Liability insurance provides protection against potential damages from a claim for personal injury, such as a slip and fall on your premises, as well as damage to other’s property, including computers and laptops, that occur as a result of business related activities, either at your workplace or at another location such as your client’s office.
No matter how careful you are there is always the risk that an unexpected event may arise beyond your control. There are various cover options available with a Business Insurance policy so it’s wise to think about which ones are relevant to your business. You can tailor a policy that suits your needs to cover for material damage losses as a result from an unexpected event like fire, theft, storm and accidental damage. These can include Building Insurance, Office Contents Insurance, and General Property Insurance to protect against loss or damage to portable and valuable property like mobiles or laptops.
You can also include cover your business for the loss of income and some of the increased costs of running your business as a result of interruption caused by events covered under your policy with Business Interruption Insurance.
Insure your most important asset.... You!
Accidents can happen when you least expect them to anyone, anywhere. Wouldn’t it be reassuring to know that you could afford to take a break to recover should something happen to you?
Personal Accident and Illness Insurance can do just that without the need of completing lengthy forms or undertaking medicals. It could pay you a benefit of up to 85% of your income, up to $3,000 per week if you are unable to work temporarily due to an accident or illness, and depending on the benefit period you choose, you could be covered for up to 2 years. There is also the option to get cover should the worst happen and you accidentally die (known as Death and Disablement), which would provide a lump sum payment to your beneficiaries.
Personal Accident and Illness Insurance gives you peace of mind 24 hours a day, seven days a week, anywhere in the world. So apply now and protect you and your family’s financial future.
Do you have a website for your bookkeeping business? Does your laptop or computer store sensitive customer information or data? What would be the financial impact on your business if someone was able to hack into your digital data?
A 2015 report released by the Australian Government shows that 33% of Australian businesses have experienced a cybercrime, with the average cost of a cyber crime attack to a business amounting to $276,323.* Whether you’re a large corporation or a SME, all types of businesses are vulnerable to cyber-attacks at any time of the day or night from anywhere in the world. Hack attacks are becoming more sophisticated and it is not uncommon for hackers to demand a ransom in order to return your data, which can be an insurable event.
Cyber Liability Insurance protects your business against the expenses and legal costs associated with data breaches, which may occur after being hacked or from theft of client information. Some policies even cover lost revenue caused by downtime. Having a Cyber Liability Insurance policy is not only good risk management for your business, it will also assist in complying with your privacy obligations under the Privacy Act.
*Australian Government – Department of Communications and the Arts, The Cost of Cybercrime to Australia, viewed on 7 June 2016