Professional Indemnity (PI) Insurance
What is P.I. Insurance?
Professional Indemnity (PI) insurance indemnifies the professional bookkeeper from losses suffered by third parties due to negligence, error, failure or mistake on the bookkeeper’s part. PI cover provides funds to make good the loss suffered by a third party and to pay the costs of defending an action to ascertain liability.
Why Have PI Insurance?
PI Insurance is an important protection for any professional person or organisation. It mitigates the financial exposures you face of being in business and, in doing so, helps to better safeguard your business and personal assets.
BAS Agents are required by the Tax Agent Services Act to maintain PI insurance to a level specified by the Tax Practitioners Board. BAS Agents are required to notify the Tax Practitioners Board of their coverage status. The specific requirements of the Tax Practitioner Board’s PI requirements are spelled out in their Explanatory Paper TPB(EP) 03/2010.
Features of the ABN Professional Indemnity Policy
ABN has, since 2001, offered its members access to what we believe is the most comprehensive PI insurance product in the market for bookkeepers.
Unlike some policies in the market, each ABN policy owner enjoys individual cover. You are not grouped or under an umbrella limit with other bookkeepers. In simple terms, this means that the actions of other bookkeepers in the insurance pool in no way diminish the cover that applies to your policy.
The ABN policy is feature rich and complies with all requirements of the Tax Practitioners Board:
Policy Feature | What This Means | TPB Requirement | ABN Policy |
| Amount of Cover | The maximum amount of money the insurer has agreed to provide | $250,000 to $1 million, depending on your turnover |  |
| Scope of Cover | The terms and conditions on which indemnity is provided | Civil liability arising from any act, error or omission in the provision of BAS services. | |
| Persons Covered | The persons to whom the insurance extends |
| |
| Exclusions | The terms and conditions on which indemnity is excluded | Cannot exclude the work of contractors if this means there is no cover for the BAS services provided to the client by that contractor | |
| Excess | The first part of the loss which has to be paid by the policy holder. | Cannot exceed the greater of 4% of turnover, or $1000 | |
| Insurance Provider | The entity providing the PI policy | An APRA approved insurer | |
The ABN policy also accords with TPB recommendations for additional policy features:
Policy Feature | What This Means | TPB Requirement | ABN Policy |
| Fraud/dishonesty/fidelity | Covers claims made against the insured (provided they are not the perpetrator) for losses through dishonest or fraudulent actions, or caused through loss of monies. | Innocent party fraud/dishonesty and fidelity cover (except for sole practitioners) | |
| Legal defence costs | The costs associated with defending a claim for civil liability | That such costs form part of the cover | |
| Automatic Reinstatement | In the unfortunate event that you have to make a claim on your policy, the limit of cover is automatically reinstated. This ensures that if there is another claim against you, the full amount of your cover applies. | At least one, and preferably multiple, automatic reinstatements | |
| Run-off Cover | Cover for unknown claims made and reported following the expiration of the policy arsing out of acts, errors or omissions occurring during the period of run-off insurance cover | Run-off cover should be taken out if the BAS Agent ceases to provide BAS services during the period of their registration | |
4 Easy Steps To Obtain PI Insurance
Arranging PI cover through ABN is a straight-forward process but, importantly, it is also a personable experience that involves a “hands on” approach with our broker.
Step 1 - Peruse the general information contained on this page of our web site and contact Tony Charman of Nationwide Insurance Brokers on (02) 9771 3144 or tcharman@nationw.com.au if you have any questions.
Step 2 - Complete the Professional Indemnity Proposal Form which requests some general information about your business. There is no obligation to proceed with anything at this point; it simply gives our broker the opportunity to make an informed judgement about your insurance needs and then provide you with information about appropriate coverage, pricing etc. Email or fax the Proposal Form to Nationwide using the addressing details provided on the form.
Step 3 - Nationwide Insurance Brokers Will Contact You. A representative from Nationwide will be in touch to provide you with a quotation or discuss your specific policy requirements, and to answer any questions you may have.
Step 4 - If you wish to proceed, Nationwide Insurance Brokers will raise a Tax Invoice and you will be covered after you make payment. At each subsequent anniversary date, Nationwide will send you a Tax Invoice and to continue your cover, you simply need to pay that invoice.
Who Stands Behind ABN’s Policy?
The Broker - Nationwide Insurance Brokers. Headed by Tony Charman, Nationwide have been with ABN since our inception in 2001. We continue to choose this broker because of their personalised service to our members. The broker is your representative. They deal with applications and annual renewals of your policy. It is their role to ensure that you get a policy that suits your circumstances and in the unfortunate event of a claim, to be your reference point with the insurer. They work closely with the underwriter to ensure that the terms and conditions of the policy meet your needs and maintain currency with changes in the industry.
The Underwriter - Resource UnderwritingPacific. We have had a long relationship with Resource because of their knowledge and experience in the PI market, not only in the broader accounting discipline, but also in the specifics of bookkeeping. They have the critical role of providing an insurance contract that meets your needs. Resource is an Australian representative agent of Lloyds of London, the ultimate risk carriers of the ABN policy. Resource were the first Branch Office of a Lloyd’s Managing Agency in Australia, and have been providing superior services in Australia, New Zealand and South East Asia since 1991.
The Insurer - Lloyds of London. Lloyds are the international benchmark against which other insurers are measured. Lloyd’s enjoys strong financial security and every policy is supported by an “A” (Excellent) rating from A.M.Best and an “A+” (Strong) rating from Fitch and Standard & Poor’s.
Do I Also Need To Consider Public Liability Insurance?
Public liability insurance protects you, and your business, from financial loss caused by injury or property damage to a member of the public anywhere in Australia as a result of negligence. Public liability insurance has become a very important segment of a business insurance portfolio as it also offers legal defence costs and provision for damages in the event of a negligence claim, be it spurious as is often the case in this day and age, or not.
Nationwide Insurance Brokers can also arrange public liability insurance for you. When it is paired with PI cover, excellent savings are possible.
Questions
If you have more detailed questions about specific inclusions/exclusions and other terms and conditions of the ABN policy, please deal directly with the team at Nationwide Insurance Brokers:
· Telephone: (02) 9771 3144
· Email: tcharman@nationw.com.au