There is no single Professional Indemnity limit suitable for every accountant or accounting practice.

The required limit can be influenced by:

• Tax Practitioners Board requirements
• Professional association requirements
• Client contracts
• Services provided
• Actual professional exposure

What should be considered? #

Relevant factors can include:

• Annual fee income
• Services provided
• Largest clients
• Engagement values
• Potential financial consequences of an error
• Audit activities
• Insolvency work
• Valuation services
• Other higher-risk professional services
• Number of directors, employees and contractors
• Defence costs
• Aggregate limits
• Reinstatements
• Excesses

Registered tax agents and BAS agents must maintain Professional Indemnity arrangements meeting the Tax Practitioners Board’s requirements.

Those requirements include minimum insurance requirements and consider matters such as business turnover and the nature of the services provided.

Professional associations can impose separate requirements on members in public practice.

A regulatory, association or contractual minimum should not automatically be treated as the appropriate overall limit for the practice.

Contact our team if you would like us to review your Professional Indemnity limit against your registrations, memberships, services and contracts.