Why do Bookkeepers, & BAS Agents need it?
Apart from being the most sensible financial and legal decision for Bookkeepers and BAS Agents, Professional Indemnity insurance is also an actual requirement in the industry.
The Tax Practitioners Board (TPB) has made it so since 2011 and with good cause – Professional Indemnity Insurance covers you against the risk of a client claiming damages. Your professionalism and service often aren’t enough to protect against these claims so that’s why it is key you have cover.
Your coverage should be based on turnover – just see the handy guide below. There is a minimum requirement for coverage as well as other risk-driven factors to consider. It may seem complicated but BizCover makes it simple with direct quote comparisons delivered in seconds.
From 1st July, 2011, the Tax Practitioners Board required Bookkeepers and BAS Agents to have Professional Indemnity (PI) insurance. Professional Indemnity insurance coverage helps to reduce the risk that an Agent will be made liable for a client’s losses, due to the conduct of the Agent in the provision or failure to provide services.
Professional Indemnity for Bookkeepers and BAS Agents^
|Tier||Turnover from the provision of BAS services||Minimum aggregate amount of cover*|
|1||Up to $75,000 (excluding GST)||$250,000 cover inclusive of legal and defence costs|
|2||$75,001 – $500,000 (excluding GST)||$500,000 cover inclusive of legal and defence costs|
|3||Over $500,000 (excluding GST)||$1,000,000 cover inclusive of legal and defence costs|
*Please note that what is an appropriate amount of cover for an agent may in fact be more than what is set as the minimum requirement.
^Minimum PI insurance requirement source from TPB (2017, June 21st). tpb.gov.au/professional-indemnity-insurance-bas-agents
What are the risk factors?
- Incorrect advice or errors on financial statements.
- Late lodgement of documentation.
- Failure to provide promised services.
- Negligence in rendering professional services.
Did you Know?
The Tax Practitioners Board (TPB) requires BAS Agents and Bookkeepers to have Professional Indemnity insurance.
3 things to consider when purchasing a Professional Indemnity policy
Find a provider that:
- Understands the coverage needs of Bookkeepers & BAS Agents.
- Is recognised by the Tax Practitioners Board.
- Consider a policy that offers unlimited retroactive cover to protect you for all past work
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