Understanding business insurance for bookkeepers

The profession of bookkeeping is one that takes experience, precision, good organisation skills and attention to detail. Your clients put their trust in you to keep their financial records spick and span, without any hidden surprises come tax time.  

But even if you have an eagle eye for errors and do your best to keep their accounts in order, we are all human, and at the end of the day mistakes can happen, no matter how unintentional. A claim could have a significant impact on your bookkeeping business, not only financially but the time involved and potential damage to your reputation. 

That’s why it’s important to understand the different types of business insurance options that are available and how they can safeguard your business when you need protection the most.  

Let’s explore the importance of business insurance and some of the major types of different coverages available to consider when protecting your bookkeeping business.  

Why do bookkeepers need to consider business insurance? 

Besides being a financial investment in your business’ future, business insurance may also be a legal requirement of your industry in order to be able to practice your profession. 

Professional Indemnity insurance* for example, is often a requirement by many industry bodies and professional memberships, stating the minimum level of coverage which you are expected to have in place. We will explore Professional Indemnity insurance in greater detail below, outlining the basic details of what the coverage provides.  

These are some examples of risk which you may encounter as a bookkeeper: 

  • Incorrect advice or errors on financial statements. 
  • Late lodgement of documentation. 
  • Failure to provide promised services. 
  • Negligence in rendering professional services. 

Professional Indemnity insurance*

One of the basic types of insurances you need to consider as a bookkeeper is Professional Indemnity insurance. Professional Indemnity insurance is designed as a form of protection for businesses that provide specialist services or professional advice.  It is intended to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. 

Professional Indemnity insurance will also assist with the legal costs related with responding to or managing claims which are covered by the policy.  

What is typically included?*

Subject to the Professional Indemnity policy selected, your policy could cover:  

  • Payment of compensation as a result of a claim, including but not limited to Court awarded damages  
  • An award of legal costs against you   
  • Reasonable legal costs incurred in defending or responding to the claim  
  • Claim investigation costs  
  • Disciplinary proceeding costs  

What is typically not covered?*

  • Intentional damage   
  • Contractual liabilities   
  • Professional fees   
  • Known claims and circumstances  
  • Fraud and dishonesty 

Public Liability insurance*

As a small business owner, you have a level of responsibility when it comes to providing a safe business environment. Whether you have clients visiting your office, home-office or you are out on the road visiting them, Public Liability insurance is something bookkeepers need to consider. 

It is designed to provide protection for you and your business in the event a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities and claim against you. 

Public Liability Insurance also provides assistance with the legal costs associated with managing claims that are covered by the policy. 

What is typically included?*

Compensation for: 

  • personal injury suffered by a third party (e.g. a customer, supplier or member of the public) due to your negligent business activities 
  • damage to property owned by a third party due to your negligent business activities 
  • legal and defence costs associated with a covered claim 

What is typically not covered?*

  • Injuries to your employees 
  • Damage to your own property 
  • Costs of rectifying faulty workmanship 
  • Professional negligence 
  • Contractual liability 
  • Events occurring before or after the policy period 

Business Insurance*

There are a variety of different Business Insurance options that can help protect the things that matter most to your business. Some of the types of cover you may need to consider for your bookkeeping business include: 

  • Contents*- Covers your business contents or stock if they were damaged in a fire, storm or due to malicious damage or some other defined event listed in the policy. 
  • Building*- Building Insurance covers your building if it is damaged by an insured event, such as fire, storm, malicious activity or other event as defined by the policy. 
  • Business Interruption*- provides protection for the loss of income and increased costs of operating your business caused by a specified insured event (such as property damage or fire).  It is also designed to assist your business to recover from an insured event by paying ongoing expenses (such as wages or rent).

It is important to note that Business Interruption cover is an additional cover option available when you take out a Business Insurance policy.

  • Portable equipment*- Portable Equipment insurance (also known as General Property insurance) covers you for loss and damage to items of portable equipment associated with your business. These can include tools of trade and items of stock.
  • Tax Audit*- Tax Audit Insurance* covers a business for specified costs in the event that it is selected by the Australian Tax Office for auditing. The policy covers the costs of accountants and other professional fees incurred in the course of an audit.

Cyber Liability insurance*

Working with and storing confidential client information online, means there’s a real risk of a privacy breach if a cyber attack were to occur. Cyber Liability insurance* is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.

Costs associated with defending a cyber claim are also covered. Examples of the types of risks Cyber Liability insurance can assist with are inadvertent loss or release of customer personal information, cyber crime, cyber extortion/ransomware and business interruption due to a cyber event.

Experience business insurance made easy

Bookkeeping is a busy business and making the time to shop around for the right business insurance policy isn’t always simple. At BizCover, leave the shopping around to us. Jump online or give us a call, and we will provide various quotes from selected leading Australian insurers. Select your policy and get your policy delivered straight to your inbox, no forms, no hassles, just insurance made easy.

*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.

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