Accountants Insurance

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Business Insurance for an Accounting Practice*

Natalia Vanzo and Smart Business Insurance handle our business insurance program including public liability, business insurance, cyber and travel insurance for our group, as well as professional indemnity insurance for our Accounting, Auditing, Bookkeeping, Wealth, and Advisory activities. As our practice continues to grow and our business activities evolve to service our clients, Natalia and the SMART team are on the journey with us, and they always find the best available cover at an affordable price. We have found Natalia to be highly responsive and efficient. She knows what questions to ask, and she has consistently demonstrated that she understands our business activities and associated insurance needs. Having worked in an accounting firm herself Natalia understands the difference between M&A accounting services (due diligence) and M&A advisory and can provide guidance regarding what coverage is suitable to mitigate our risks so we can operate with confidence . It is great to have on her on our team , protecting our interests and negotiating strongly on our behalf. To be honest, I would love to recruit Natalia to work with us as an accountant at Ashfords!
Greg Cusack
CEO Ashfords Chairman AGN Asia Pacific

Accounting firms provide professional advice to clients on matters including taxation compliance, financial reporting, and business advisory for a fee, and they require professional indemnity insurance to protect themselves and their business. Many recognised Accounting Bodies in Australia and NZ require accountants to maintain particular levels of Professional Indemnity Insurance, depending on activities undergone.

If an accountant makes an error, such as providing incorrect information, makes an omission in due diligence, or provides advice that leads to financial losses for a client, a client may seek to recover these losses from their accountant.

Accountants also face risks in relation to the commercial premises they operate from risks such as fire, perils, and theft or may be liable if a client slips and fall down their stairs, badly injures themselves and claims against them.

Cyber Insurance may provide cover if an accountant’s networked computers are hacked and confidential client data is stolen.

Management Liability Insurance should be considered for accounting firms with multiple employees that may be liable when things go wrong with Human Resources, Statutory Liability and OH & S.

Fortunately, suitable business insurance for accountants may provide protection against financial hardships that could arise from poor advice, computer hacking, employee matters, accidents, property damage, or legal claims caused by your accountancy business activities.

Many Business Owners are UNSURE if they are COVERED PROPERLY.
We help them find affordable and SUITABLE INSURANCE so they can run their business with CONFIDENCE.*

What Insurance does my Accounting Firm need?

Some of the major types of business insurance covers available to accountants in Australia are explained below and include:

  • Professional Indemnity Insurance
  • Business Pack Insurance (incl. Public Liability)
  • Cyber Insurance 
  • Management Liability Insurance

Professional Indemnity Insurance For Accounting Firms*

Professional indemnity insurance is the essential cover for accountants.  In fact, CA ANZ and CPA require accounting firms to take out a minimum level of Professional Indemnity Insurance.

Your Professional Indemnity insurance policy should cover all aspects of your Accounting Practices services and work.

Professional Indemnity provides protection for financial losses which can arise from:

  • Errors when undertaking an audit
  • Errors in preparation of financial statements
  • Negligent accountancy advice
  • Accounting and book-keeping errors
  • Professional negligence during M&A due diligence
  • Client receiving fines and penalties due to your advice given

Professional Indemnity Insurance may help accounting firms stay in business by paying for legal defence costs, public relation expenses, privacy brief costs and settlement of financial losses.

The level of Professional Indemnity cover required and insurers which are suitable, will differ depending on the activities you undertake, for example:

  • Financial Accounting for Private Companies
  • Financial Accounting for Public Companies
  • Audit of Private Companies
  • Audit of Public Companies
  • Insolvency
  • M&A Advisory
  • M&A Due diligence
  • Tax Accounting
  • Superfund Accounting & Audit

Claims can run into the hundreds of thousands of dollars or even millions of dollars, therefore it is important that an adequate level of cover is chosen to protect against major financial loss, which will not only have an impact on your business but could also affect your personal assets.

Business Pack Insurance for Accounting Firms*

Accountants may be able to combine multiple covers in a single business insurance pack policy.

Business Pack Insurance includes:

Public & Products Liability*

Public Liability Insurance is designed to provide your firm protection for:

  1. Slip-and-trip accidents that occur at your office – E.g., a client is injured when they slip in your office
  2. Damage to third-party property – E.g., you cause damage to the building you are leasing.

Property Damage – This covers your firm’s business contents and stock (if-any) for physical damage due to an event such as fire, storm, accidental impact damage. Your contents can include your fit-out, monitors, furniture, computers, printers or servers.

Theft – Provides cover if you firm is broken into, and contents or stock are stolen.

Machinery Breakdown – This covers the repair/replacement cost if your machinery breaksdown due to a mechanical failure (E.g., break-down of your servers or printers). This does not cover general wear and tear.

Business Interruption – This provides cover for lost income, if your business operations and turnover are impacted due to an insurable event (E.g., fire, storm).

Glass – Often required as part of a lease agreement, this provides cover for replacement of glass in your premise.

Cyber Insurance for Accounting Firms*

Cyber Insurance coverage can protect your business for claims due to a cyber event, some examples include:

  • Cyber Hacking – Malicious or unauthorised access to your IT infrastructure, which may put your confidential client data at risk.
  • Privacy errors – Your acts or omissions that lead to unauthorised disclosure of your client’s data
  • Insider and Privlege Misuse – Unapproved or malicious use of oragnisations resources by insiders or external misuse through collusion, putting your data at risk
  • Criminal Financial Loss – For example, a book-keeper may pay a fictitious invoice on behalf of your client, resulting in a large financial loss

Cyber Event Insurance cover includes coverage for:

  • cyber event response costs (IT forensics, virus extraction, client notification costs, public relation costs)
  • Losses to your business due to a cyber event
  • Losses to other businesses (e.g., your clients) due to a cyber event (Fines and penalties, regulatory investigations, defence costs)
  • Contingent Business interruption
  • Tangible Property
  • Criminal Financial Loss

Management Liability Insurance Accounting Firms*

Management Liability Insurance may provide valuable protection for directors, for specified issues relating to Human Resources, OH & S and Statutory Liability.

Examples of management liability claims include:

  • Employee claims for wrongful termination, demotion or refusal to promote
  • Employee theft/crime
  • OH & S Claims
  • Claims where directors/partners can be personally liable, for actual or alleged mismanagement
  • Fines and Penalties for unintentional breaches of certain statutes
  • Tax Audit Cover

Want your QUESTIONS on Business Insurance ANSWERED?
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How much does business insurance cost for Accounting Firms?*

Key factors in determining how much business insurance will cost for your accounting practice?

  • The size and turnover of your accountancy practice
  • Number of staff
  • The optional covers selected
  • Your claims history
  • Experience and qualification of directors/partners
  • Areas of practice such as Audit, Insolvency, M&A Due-diligence/Advisory, Financial Accounting. For example, practices in Australia are required by ASIC to have fidelity cover for registered insolvency practitioners.
  • Breadth of Coverage
  • Indemnity Limit
  • Excess / Deductible

Do accountants need to have insurance? *

Certainly, accountants in Australia are highly advised to obtain insurance, especially because of the financial and advisory responsibilities of their jobs. Professional indemnity insurance is a must as it may protect accountants against legal costs and claims for damages in case of an act, omission, or breach of professional duty in the course of their work.  Accountants also need other kinds of commercial insurance like public liability insurance, cyber liability insurance, and, of course, business insurance that may cover the property, contents, and business interruption.

Do accountants need public liability insurance? *

Public liability insurance is not something that the law in Australia requires accountants to have, but it is a wise thing to get. For accountants, public liability insurance may provide protection for incidents like a client tripping over in your office and getting hurt. Although the need for public liability may not seem as relevant as professional indemnity insurance for accountants , it is the perfect backup in case of unexpected incidents that may occur to third parties.

Do accountants need professional indemnity insurance? *

Without a doubt, professional indemnity insurance is of the utmost importance for accountants in Australia. This type of coverage is mandatory for may accountants in Australia. This insurance may protect accountants from claims made against them regarding their professional advice and services, including the costs and damages caused by legal actions. Client’s trust accountants, and having suitable professional insurance helps maintain and build this trust.

What type of accountants may be covered with business insurance ?*

  • Chartered Accountancy Firms
  • Certified Practising Accountants (CPA) Firms
  • Tax Agents
  • BAS Agents
  • Bookkeepers
  • Payroll accounting services
  • Payroll preparation services
  • Auditors
  • Company Secretarial Services

Why should accountants use an insurance broker in Australia?*

If you are an accountant deciding on whether to use an insurance broker for your business insurance, it is important to consider that brokers actin the interests of you, not the insurer.

Direct insurers and agents act for the insurer. This can be important; especially if you need to claim.

Brokers can help your accounting firm by:

  • Sourcing competitive quotes on policy inception
  • Negotiate with the insurance companies to prevent or limit increases on renewal
  • Remarket your policy to other suitable insurance companies where appropriate
  • Review policy wordings and to make sure your firm is covered properly
  • Act for you at claim time

How do I get an insurance quote for my accounting firm?

Simply TALK to a SMART Business Insurance broker on 1300 542 573 or contact us online for suitable and affordable business insurance quotes for your accountancy practice.

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