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Professional Indemnity (PI) insurance is an essential form of cover for all practicing accountants. In fact, accountants are generally required to comply with specific professional standards and legislation that requires them to hold a minimum amount of PI cover to protect against claims of negligent acts, errors and omissions as a result of their work.
So, how much does PI insurance cost for an accountant? It all depends on a number of key factors such as:
We have put together a snapshot of how much PI insurance can cost using data from BizCover policies sold during the 2016/17 financial year. The sample we analysed includes more than 130 accountants in NSW that have 10 or fewer employees.
|We know, sometimes you just want a quick idea of how much your insurance is actually going to cost. However, it’s important to note that the data included within this article was sourced from BizCover customer data during 2016/2017 and is intended as a guide only. It may not reflect pricing for your particular business as individual underwriting criteria will apply. Get a hassle-free quote for your business here.|
On average, accountants can expect to pay around $103.37 per month for Professional Indemnity insurance.
Below is the full breakdown:
The number of employees and the amount of revenue your business turns over can have an impact on the cost of your Professional Indemnity policy.
Generally, the higher the revenue your business generates, the higher your PI insurance premium will most likely be. For example, an accountant generating between $50,000 to $100,000 could pay up to $98 per month. In comparison, an accountant turning over $200,000 or more is likely to pay around $210 or more per month for their PI cover.
This is mainly because a higher turnover indicates that your business is undertaking a greater amount of work, creating a higher exposure to more risks and greater chance that something may go wrong.
Similarly, the more employees you have can also demonstrate a higher volume of work, and with more people comes an increased risk of a claim occurring, meaning your premium is most likely to increase as your business grows in size.
Almost 70% of accountants insured through BizCover are sole traders. Our data shows that they are paying approximately $94 per month for their PI cover. However, those with one to five employees pay anywhere between $117 to $180 per month.
Below is the full breakdown:
Fortunately, the cost of Professional Indemnity cover for accountants does not increase too significantly as the level of cover increases.
Most accountants insured through BizCover hold $2 million worth of PI cover, with an average monthly premium of $116.60, however those holding $5 million of cover are only paying $118 per month.
The amount of cover you elect to take can be influenced by a number of things, such as the type of risks your business is exposed to, as well as any work contracts you take on and / or industry-based requirements.
It is important to note, that cost of Professional Indemnity insurance is not influenced by one factor alone, but a combination of key factors mentioned above.
|Coverage level||Average monthly premium|
*Data based on NSW BizCover customers