Professional Indemnity Insurance for Tax Agents

Professional indemnity insurance covers civil liability arising from your professional services. Registered tax and BAS agents must meet the Tax Practitioners Board’s PI requirements throughout registration. Check the insured services and people, the limit and the policy wording before accepting a quote.

What the TPB Requires of Your PI Cover

The Tax Practitioners Board (TPB) sets its requirements in TPB(GS) 06/2010, Professional indemnity insurance requirements for tax and BAS agents. Cover must suit the losses your clients could suffer from your work.

For ordinary tax and BAS agent registrations, the minimum aggregate cover follows your business turnover. Turnover excludes GST.

Business turnover	Minimum aggregate cover	What the figure means
Up to $75,000	$250,000	Minimum for this turnover band
$75,001 to $500,000	$500,000	Minimum for this turnover band
Over $500,000	$1,000,000	Minimum for this turnover band

The TPB’s insurance summary expresses the table’s aggregate minima with legal and defence costs included. The policy must fund those costs outside the indemnity limit, or have a sufficiently increased level of cover to account for them. Under the second option, the increased cover must account for defence costs beyond the turnover minimum. Ask your broker to show how the arrangement meets Table 3 of the TPB guidance. Your potential client losses can justify a higher limit than the minimum.

A tax agent with a tax (financial) advice services condition has separate cover requirements. Use the TPB’s guidance for that registration condition before selecting a limit.

A sole trader charging clients for tax or BAS services needs suitable cover. Employees and contractors providing client services on another practitioner’s behalf must be covered by their own policy or that practitioner’s policy. Agents relying on another practitioner’s cover report their employer or principal’s name and registration number to the TPB. Confirm cover for subcontracted work for which the practice is liable.

The TPB exempts employees who provide only in-house tax services to their employer from the insurance requirement. Agents providing only voluntary tax services with honorary rewards also qualify for the TPB exemption. These exemptions cease to apply if the agent starts providing services for a fee or other reward.

Check the named insured against the entity contracting with clients. A policy covering an individual does not automatically settle cover for a separate company. List every service you provide, including any advisory work outside routine returns or BAS preparation.

The TPB duty is national. Queensland, New South Wales, Western Australia and Victoria do not have different TPB turnover bands. Territorial limits, the jurisdiction for claims and professional standards scheme conditions still need a separate check in your policy.

Policy Features to Check

PI cover must respond to civil liability from acts, errors or omissions in the tax or BAS services you provide. A certificate of currency shows that a policy exists. Read the schedule, wording and endorsements to establish what it covers.

Use the following questions when comparing policies with a broker.

Policy term	Question to ask	Why it changes the choice
Insured services and people	Does the wording cover each service and everyone working on the practice’s behalf?	An excluded service can leave the relevant client loss uninsured.
Indemnity limit	What are the per-claim and aggregate limits, including any sublimits?	Several claims can exhaust an annual aggregate.
Defence costs	Are legal and defence costs additional to the limit?	Defence spending can affect the amount available for compensation.
Excess	Can the practice pay this amount when a claim arises?	An unaffordable excess leaves a funding gap.
Claims basis	When must a claim or circumstance be reported?	Claims-made cover depends on the policy’s reporting conditions.
Retroactive cover	Does the replacement preserve cover for earlier work?	Changing insurers can expose a gap for past services.
Run-off	What cover continues after services stop, and how is it purchased?	A claim can arrive after retirement or closure.
Exclusions	Which services, events or jurisdictions are excluded?	A general policy label cannot override an exclusion.

Retroactive cover is a minimum requirement. Fidelity and run-off are additional features the TPB recommends considering. Fidelity generally concerns the practice’s own direct financial loss from employee or partner misconduct. Fraud or dishonesty liability cover addresses claims against an innocent insured party. Ask which protection the policy actually provides.

Run-off covers claims arising from earlier work after the practice stops providing services, subject to its terms. Keep PI cover while you remain registered. After registration ends, the TPB duty ends, but earlier work can still produce civil claims. Discuss the run-off period against that exposure before cancelling.

Public liability covers different risks, such as injury or property damage arising from business activities. It does not replace PI cover. A client’s claim about incorrect tax advice needs the professional-services wording checked, even if you also hold public liability insurance.

For a small practice, prioritise the correct services and an excess you can fund. For a practice with employees or subcontractors, examine insured-person wording and responsibility for their work. For a retiring practitioner, compare run-off terms before choosing the cheapest renewal.

BAS Agent Insurance and Bookkeeper Insurance

Registered BAS agents have the same national PI obligation, with cover matched to their BAS services and client exposure. A bookkeeping policy purchased before registration needs to cover the BAS services you will undertake.

An unregistered bookkeeper has no TPB registration-based PI duty. Association membership or a client contract can still require insurance. Insurance also leaves the rules about which BAS services require registration unchanged.

Before applying, give the broker your proposed service list and registration plans. Ask for written confirmation of cover for those activities. Keep that confirmation with the policy documents and your tax agent registration records.

Professional Standards Schemes

A professional standards scheme can cap participating members’ civil liability for qualifying occupational claims. The Professional Standards Councils’ current scheme register includes Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants.

Membership of a professional body alone does not establish scheme participation. Check your eligibility, the scheme applying to your work and the relevant liability ceiling. Participating members must satisfy the scheme’s insurance and risk-management conditions.

The insurance must support the applicable cap. Scheme participation sits beside your TPB obligation, so compare the scheme’s required insurance with the TPB minimum and your actual risks. Use the higher cover requirement where both apply.

The Councils’ disclosure guidance requires participating members to display the prescribed limited-liability statement on relevant business documents and websites. Obtain the exact wording and presentation requirements from that guidance before updating your engagement letter or website.

A cap does not apply to every claim. The Councils explain that dishonesty, fraud, breach of trust and personal injury are generally outside limited liability. The scheme’s terms and the relevant legislation determine whether a particular claim qualifies.

What Drives the Cost of Professional Indemnity Insurance for Accountants

PI premiums depend on your fee income, service mix, staff and claims history. The limit, excess and policy terms also affect the quote. Scheme participation and documented risk management form part of the practice information to disclose.

Prepare the same information for every quote.

• Actual fee income and the forecast for the coming policy period.
• Services provided and the share of income from each service.
• Number of staff and the work allocated to subcontractors.
• Claims history and circumstances that could produce a claim.
• Requested per-claim and aggregate limits, with the proposed excess.
• Professional standards scheme participation and the applicable insurance requirement.
• Existing retroactive cover and the run-off terms you need.

A clear engagement letter records agreed services and responsibilities. Client identity checks and records of advice help you explain how the practice handles risk. They do not guarantee a lower premium.

The indemnity limit is the amount of cover. The premium is the amount you pay for the policy. A low premium with excluded advisory work cannot protect a practice that provides that advice.

This page quotes no premiums. Ask for quotes using matching services, limits and excesses, then compare exclusions and reporting conditions. An average price or a cheapest-policy label gives little guidance when those assumptions differ.

Keeping Cover in Place

If your services require PI cover, keep suitable cover throughout registration and demonstrate it when applying for renewal. TPB registration renewal and annual policy renewal are separate tasks.

Update your PI details in the TPB’s My Profile whenever the policy changes, including each renewal. If you cease meeting a registration requirement, notify the TPB within 30 days of becoming, or reasonably being expected to become, aware. The change-of-circumstances guidance explains that reporting duty. A notification period does not authorise working without required cover.

At policy renewal, check the following items before the previous cover expires.

• Turnover matches the figures declared to the insurer.
• The service list includes work added during the year.
• The insured entity and people match the practice providing the services.
• Retroactive cover continues without losing the earlier protected period.
• Limits and excesses still suit client exposure and available funds.
• The certificate of currency, schedule and endorsements are retained.
• The TPB policy record reflects the new cover.

If a replacement quote has a later retroactive date, ask for the gap to be resolved before accepting it. Retain both policies and the written explanation of continuity.

Cyber Insurance for Accountants

Cyber insurance is separate from the PI cover required for TPB registration. The TPB recommends considering additional cyber protection after assessing your risks. PI cover responds to professional-services liability, while cyber policies can address other losses from a cyber incident.

Compare the following policy questions against the client information you hold and the providers you use.

Exposure	What to ask about
Breach response	Access to incident specialists, notification expenses and approved response costs.
Client-data liability	Claims involving personal information and the applicable exclusions.
Payment redirection	Whether fraudulent transfers have specific cover, a sublimit or an exclusion.
Outsourced providers	How an incident at a cloud or other service provider affects cover.
Business interruption	The trigger, waiting period and calculation of an insured loss.
Financial terms	Limits, excesses and any conditions attached to each part of cover.

These are questions to compare, rather than promises that every policy covers each event. Describe your systems, client-data volumes, outsourced services and incident history consistently when seeking quotes. Compare the same limits and excesses, including any sublimits for payment redirection or provider incidents.

Keep prevention work in your cyber security arrangements. Use your data breach response plan for the actions and notifications after a breach. This insurance comparison helps you establish which losses the policy addresses.

Obtaining Cover Before You Start Work

Obtain confirmed PI cover for the services and entity providing them before undertaking the work. An online quote is an offer based on stated assumptions. It does not establish that the insurer has bound cover.

1. Describe the practice. Give the insurer the legal entity, people involved and full service list.
2. Supply the quote information. Disclose income, claims and relevant circumstances accurately.
3. Compare the wording. Resolve excluded services, retroactive gaps and excesses you cannot fund in writing.
4. Confirm cover is bound. Obtain the insurer’s acceptance, commencement details and any conditions still requiring action.
5. Retain the documents. Keep the certificate, schedule, wording and endorsements together.
6. Check the result. The named insured, covered services and commencement of cover must match the work about to begin.

For a new registration, provide your PI arrangements to the TPB within 14 days of registration notification unless supplied in the application. If the schedule names the wrong entity or leaves a service excluded, have the insurer correct it before starting that work.