Whether an accountant is required to hold Professional Indemnity Insurance depends on their services, registrations, professional memberships and contractual obligations.

For many accounting practices, Professional Indemnity Insurance is required rather than simply optional.

When can Professional Indemnity Insurance be required? #

Examples include:

• Registered tax agents and BAS agents: the Tax Practitioners Board requires registered practitioners to maintain Professional Indemnity Insurance, or be covered by an arrangement, that meets its requirements.
• Professional association membership: accountants in public practice may have insurance requirements imposed by their professional association.
• Financial services: accountants providing regulated financial services may have insurance or compensation arrangement requirements associated with an Australian Financial Services Licence or authorised representative arrangement.
• Client contracts and tenders: clients can specify minimum Professional Indemnity limits and other policy requirements.
• Professional Standards Schemes: participation can involve separate insurance requirements.

The required:

• Limit
• Excess
• Retroactive cover
• Defence-cost structure
• Run-off period
• Policy wording

can vary between these requirements.

An accountant who is not subject to a specific regulatory, membership or contractual requirement can still face claims arising from professional services.

Requirements can change, so current obligations should be checked with the relevant regulator, professional association or licence holder.

Contact our team if you would like us to compare an insurance requirement with your existing or proposed Professional Indemnity policy.