Why do Registered Tax Agents need it?
Apart from being the most sensible financial and legal decision for Registered Tax 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 isn’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 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 Registered Tax Agents
||Turnover from the provision of BAS services
||Minimum aggregate amount of cover*
||Up to $75,000 (excluding GST)
||$250,000 cover inclusive of legal and defence costs
||$75,001 – $500,000 (excluding GST)
||$500,000 cover inclusive of legal and defence costs
||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.
What are the risk factors?
- Errors and discrepancies on Tax Returns.
- Late lodgement of documentation.
- Failure to provide promised services.
- Negligence in rendering professional services.
3 things to consider when purchasing a Professional Indemnity policy:
Find a provider that:
- Understands the coverage needs of Tax Agents.
- Is recognised by the Tax Practitioners Board.
- Consider a policy that offers unlimited retroactive cover to protect you for all past work