Accountant Professional Indemnity Insurance

For a sole practitioner or small accounting firm, PI insurance typically costs between $1,200 and $3,500 per year depending on fee revenue, services provided and claims history. Mid-tier firms with higher revenue and broader service offerings can expect premiums from $5,000 to $15,000 or more. The best way to get an accurate price is to request a free quote through Shielded.

The minimum limit depends on your professional body's requirements and the TPB's adequacy standard. CPA Australia and CA ANZ set minimum limits starting at $250,000 for smaller practices, with higher minimums for larger firms. In practice, many accountants carry $1 million to $2 million in cover. Your broker can help you assess an appropriate limit based on your largest client exposures and the services you provide.

If your error caused the client to incur ATO penalties and interest, and the client makes a claim against you for those amounts, your PI policy will typically respond to cover the client's loss (including the penalties they suffered) up to your policy limit. However, penalties imposed directly on you by a regulator are only covered if your policy includes a statutory liability extension.

Run-off cover is an extended reporting period that allows you to make claims after you cease practising. Because PI insurance is claims-made, a claim can arrive years after the work was performed. If you retire, close your practice or change careers, run-off cover ensures you are still protected. Most professional bodies require a minimum of seven years of run-off cover.

Yes. All BAS agents registered with the Tax Practitioners Board must maintain PI insurance that is adequate for the services they provide. This applies to sole trader bookkeepers, contract BAS agents and bookkeeping firms alike.

Yes. A standard accountant PI policy covers the firm and its employees for professional services performed in the course of the firm's business. If you engage subcontractors or outsource work, check that the policy extends to cover those arrangements as well.

Practising without PI insurance can result in deregistration by the TPB, loss of your public practice certificate from your professional body, and potential breach of ASIC requirements if you hold an AFSL. Beyond the regulatory consequences, you would be personally liable for the full cost of defending and settling any claim, which could be financially devastating.

Professional indemnity (PI) insurance protects professionals and businesses against claims arising from negligent acts, errors, omissions or breaches of professional duty in the provision of services or advice. It covers legal defence costs, settlements and damages awarded against you. PI insurance operates on a claims-made basis, meaning the policy in force when the claim is made responds - not the policy in force when the work was performed.

Any professional who provides advice, designs, recommendations or services to clients should carry PI insurance. This includes accountants, architects, engineers, lawyers, financial planners, mortgage brokers, IT consultants, real estate agents, builders, health practitioners, management consultants and many more. For many professions, PI insurance is mandatory under Australian legislation or industry body requirements.

PI insurance premiums depend on your profession, annual revenue or fee income, claims history, limit of indemnity required and the scope of services you provide. A sole practitioner consultant might pay $500 to $2,000 per year for $1M cover, while a mid-size engineering or accounting firm could pay $5,000 to $20,000+ for $5M to $10M cover. High-risk professions like financial planning or building design attract higher premiums.

PI insurance typically covers legal defence costs (solicitors, barristers, court fees), damages or settlements awarded to the claimant, investigation costs from regulatory bodies, breach of professional duty, negligent acts or omissions, unintentional breach of confidentiality, loss or damage to client documents, and defamation arising from professional activities. Cover extends to past work through retroactive dates.

Yes, for many regulated professions in Australia. Mandatory PI insurance requirements apply to solicitors, financial advisers (AFSL holders), mortgage brokers, accountants (registered tax agents), architects, building practitioners in most states, real estate agents, migration agents, customs brokers, and various health practitioners. Requirements vary by state and professional body - check your specific obligations.

Professional indemnity covers financial loss caused by your professional advice or services - for example, an accounting error that costs a client money. Public liability covers physical injury or property damage caused by your business operations - for example, a client tripping over a cable in your office. Most professionals need both, but they cover fundamentally different risks.

PI insurance operates on a 'claims-made' basis, meaning the policy that responds is the one in force when the claim is first made or notified - not the policy that was in force when the work was performed. This is why continuous, unbroken cover is essential. If you change insurers or let your policy lapse, you may lose cover for past work. Run-off cover is available for professionals who retire or close their practice.

The limit of indemnity you need depends on your contractual obligations, regulatory requirements and risk exposure. Many contracts require $1M, $2M, $5M or $10M minimum cover. Regulatory requirements vary by profession - for example, AFSL holders have specific minimums set by ASIC. Consider your largest client contracts and the potential financial impact of a claim when selecting your limit.

Contact us at Shielded Insurance on 1800 97 98 99 or your insurer directly. With PI insurance, early notification is critical - you must notify your insurer of any claim or circumstance that could give rise to a claim as soon as you become aware of it. Late notification can jeopardise your cover. Never admit liability or attempt to settle a claim without insurer approval.

We access a broad range of Australian domestic markets, specialist underwriting agencies and international capacity including Lloyd's of London syndicates. This allows us to place cover for standard professions through to complex or hard-to-place risks. As brokers, we compare multiple options to find competitive and suitable cover for your profession and risk profile.