Professional Indemnity focuses on claims arising from insured professional services, while Cyber Insurance can address risks such as data breaches, ransomware, incident response, system interruption and privacy liability. One incident can involve both policies, and limited cyber extensions in a Professional Indemnity policy should not be assumed to replace standalone Cyber Insurance.

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An accounting practice may remain responsible to its client for work performed by subcontractors or outsourced providers. Disclose material outsourcing, check providers’ qualifications, insurance and privacy controls, and manage client data, supervision and contractual responsibilities carefully.

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Engagement letters and client contracts can create liabilities that are broader than the accountant’s ordinary professional duty and may not be fully insured. Broad indemnities, unlimited liability, outcome guarantees, unusual warranties and responsibility for third parties should be reviewed before agreement.

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Insurers commonly ask about the practice, services and fee split, income, clients, directors and staff, qualifications, registrations, memberships, limits, previous insurance, retroactive date, claims and known circumstances. Audit, insolvency, financial advice, valuations and unusual engagements may require additional information.

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Claims can involve tax or lodgement errors, missed deadlines, incorrect statements or advice, audit or valuation issues, confidentiality breaches, conflicts of interest, delays or inadequate supervision. Professional Indemnity and Cyber Insurance may address different parts of a matter, depending on the circumstances and policy terms.

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Requirements depend on services, registrations, memberships and contracts. Registered tax agents and BAS agents must maintain Professional Indemnity arrangements meeting Tax Practitioners Board requirements, while professional associations, financial-services arrangements, tenders or client contracts may impose further requirements.

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Many accounting and related services can be considered where they are disclosed to and accepted by the insurer, including accounting, bookkeeping, BAS, tax, payroll, audit, valuations, insolvency and SMSF work. Higher-risk or regulated activities may require additional information, insurer approval or separate authorisation.

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There is no single suitable limit for every accountant. Consider regulatory, professional association and contractual requirements as well as fee income, services, largest engagements, potential loss, defence costs, aggregate limits, reinstatements and excesses.

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Professional Indemnity Insurance can respond to certain claims alleging financial loss from an accountant’s insured professional services, advice or failure to act. Depending on the policy and claim, cover can include defence costs and insured liabilities.

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Professional Indemnity Insurance is a key cover for accounting practices and may be required for registered tax agents, BAS agents or some professional memberships. Depending on the practice, Cyber, Public Liability, Business, Management Liability, Crime or Fidelity, Motor and Workers Compensation may also be relevant.

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