Professional Indemnity Insurance for Accountants and Bookkeepers

If you’re an accountant or bookkeeper in public practice, professional indemnity insurance isn’t just recommended - for most of you, it’s mandatory.

CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ), and the Tax Practitioners Board all have PI requirements. And even if your specific registration doesn’t mandate it, the risk of a client claim makes PI a practical necessity.

At Tank Insurance, we place PI for accounting firms, sole practitioner accountants, bookkeepers, and BAS agents. Here’s what you need to know.

Who needs PI insurance?

The short answer: if you provide accounting, tax, or bookkeeping services to clients, you need PI.

Role	PI Required?	Typical Minimum
CPA in public practice	Yes - CPA Australia requires it	$2 million minimum (can be higher based on services and fees)
Chartered Accountant in practice	Yes - CA ANZ requires it	Varies by engagement fee and service type (from $2 million)
Registered Tax Agent	Yes - Tax Agent Services Act 2009	Based on turnover (from $1 million)
Registered BAS Agent	Yes - TPB requires it as a condition of registration	Based on turnover
Bookkeeper (not BAS registered)	Recommended	$1 million
Financial planner/adviser	Yes - separate requirements under Corporations Act	Varies by licence conditions

The professional body requirements are the minimum. Depending on your practice size, client types, and services, you may need more.

What does PI cover for accountants?

PI covers claims where a client alleges your professional work caused them a financial loss. For accountants and bookkeepers, common claim scenarios include:

Tax advice errors

You advise a client on a tax position that turns out to be incorrect. The ATO issues a penalty notice and the client claims the penalty and any additional tax against you. Even if you followed reasonable practice, the defence costs alone can run into tens of thousands.

Missed deadlines

You miss a lodgement deadline - BAS, tax return, or regulatory filing. The client incurs late fees, penalties, or interest. They claim those costs against you.

BAS and payroll errors

Incorrect BAS lodgement, wrong tax codes, payroll calculation errors, or superannuation underpayments. These are among the most common bookkeeper claims because they’re easy to make and can affect multiple reporting periods.

Financial reporting mistakes

Errors in financial statements that lead to poor business decisions. A client relies on incorrect financials to make a business decision (like taking on debt or making an acquisition) and suffers a loss.

Audit and assurance failures

If you provide audit or assurance services and miss a material misstatement, the consequences can be significant - particularly if third parties (investors, lenders) relied on the audited statements.

Breach of confidentiality

Accidentally disclosing a client’s confidential financial information. This can trigger both a PI claim and a privacy complaint.

Professional body requirements

Each professional body has specific PI requirements. Here’s a summary:

CPA Australia

Members in public practice must hold PI insurance that meets CPA Australia’s minimum requirements. The floor is $2 million, but the required amount can be higher depending on the type of services you provide and your fee income - ranging up to $75 million for larger practices. The policy must be with an APRA-authorised insurer and comply with CPA Australia’s insurance guidelines.

CA ANZ (Chartered Accountants)

Members holding a Certificate of Public Practice must maintain PI insurance. CA ANZ sets minimum cover levels based on the engagement fee and the type of service - for example, audit engagements start at $2 million where the engagement fee is under $100,000, but scale up to $50 million for larger engagements. CA ANZ also requires the policy to include specific features like retroactive cover and run-off provisions.

Tax Practitioners Board (TPB)

Registered tax agents and BAS agents must maintain PI insurance under the Tax Agent Services Act 2009. The TPB prescribes minimum cover amounts based on your turnover - for example, agents with turnover over $500,000 must maintain a minimum aggregate of $1 million. PI insurance is a condition of registration for both tax agents and BAS agents, and failing to maintain adequate cover can result in termination of your registration.

IPA (Institute of Public Accountants)

Members in public practice must hold PI insurance. The IPA’s By-Laws set a base minimum of $1 million per claim, which is lower than CPA Australia’s $2 million floor. However, under the Professional Standards Scheme, PPC holders with fee income under $10 million must hold at least $2 million. The required amount depends on the interaction between IPA By-Laws and the applicable Professional Standards Scheme cap.

If you’re a member of multiple bodies, your PI policy needs to satisfy all of them. A broker ensures your policy ticks every box.

Key policy features for accountants

Not all PI policies are created equal. Here’s what to look for in an accountant-specific policy:

Retroactive date

PI is a claims-made policy. The retroactive date determines how far back your cover extends. If you’ve been in practice for 10 years, your retroactive date should go back to when you started - not just to when you took out the current policy.

Switching insurers without preserving your retroactive date can leave years of past work uninsured. We’ve covered this in our retroactive date guide.

Run-off cover

When you retire, sell your practice, or stop providing services, you still need cover for claims arising from work you did while you were practising. This is called run-off cover.

Professional bodies require you to maintain run-off cover after ceasing practice. CPA Australia, for example, requires run-off cover for at least seven years following cessation of business. Some PI policies include automatic run-off cover - others don’t. Check your policy and plan ahead.

We covered run-off in detail in our run-off cover guide.

Fidelity cover

Fidelity cover protects against dishonest acts by employees - for example, if a staff member misappropriates client funds. For CPA members, this isn’t optional - CPA Australia’s By-Laws require your PI policy to include cover for losses arising out of dishonesty. Many other accountant PI policies include fidelity cover as standard or offer it as an extension.

Statutory liability

Covers fines and penalties imposed on you under statute - for example, penalties from the TPB or ATO. Not all PI policies include this automatically.

Loss of documents

Covers the cost of restoring or recreating client documents that are lost, damaged, or destroyed while in your custody.

How much does PI cost for accountants?

General ranges based on the market:

Practice Size	Cover Level	Typical Annual Premium
Sole practitioner (under $200K revenue)	$2M	$1,200 - $2,500
Small firm (2-5 staff)	$2-5M	$2,500 - $6,000
Mid-size firm (5-20 staff)	$5-10M	$5,000 - $15,000
Larger firm	$10M+	$10,000+

Premiums depend on revenue, number of principals, services offered, claims history, and whether you provide higher-risk services like audit, financial planning, or SMSF advice.

Practices that offer tax advice only generally pay less than those providing audit, financial planning, or SMSF administration - because the claims risk profile is different.

Common mistakes accountants make with PI

1. Meeting the minimum and stopping there - your professional body’s minimum is just that. If your practice handles high-value clients or complex work, $2 million might not be enough
2. Not disclosing all services - if you start offering SMSF advice, financial planning, or audit services without updating your PI insurer, those services may not be covered
3. Losing retroactive cover when switching - changing insurers without preserving your retroactive date leaves a gap in your cover
4. No run-off plan - retiring without run-off cover means claims from past work have no cover. Plan this before you wind down
5. Ignoring cyber risk - accountants are high-value cyber targets. PI covers professional advice errors - it doesn’t cover a ransomware attack on your practice. You may need standalone cyber insurance as well

Frequently Asked Questions

Is PI insurance mandatory for accountants in Australia?

For CPA and CA members in public practice, yes. Registered tax agents and registered BAS agents must also hold PI insurance under the Tax Agent Services Act 2009 - it’s a condition of registration, and failing to maintain it can result in termination. For bookkeepers who aren’t BAS registered, there’s no strict legal mandate, but PI is strongly recommended.

How much PI cover do accountants need?

It varies by professional body and the nature of your work. CPA Australia starts at $2 million but scales higher based on services and fees. CA ANZ minimums depend on engagement fees and service type. The IPA By-Law minimum is $1 million, though the Professional Standards Scheme may require more. The right level for your practice depends on your size, revenue, and the complexity of your work - larger practices or those doing audit, SMSF, or financial planning may need $5 million or more.

What does accountant PI insurance cover?

Claims where your professional work caused a client financial loss - incorrect tax advice, missed deadlines, BAS errors, reporting mistakes, audit failures, and breach of confidentiality. Covers defence costs and any damages or settlements.

Do bookkeepers need PI insurance?

If you’re a registered BAS agent, PI insurance is mandatory - the TPB requires it as a condition of your registration. For bookkeepers who aren’t BAS registered, it’s not legally required, but the risk of client claims from data mistakes or payroll issues still makes PI a practical necessity. Keep in mind that most bookkeepers providing any kind of BAS work need to be registered, so the unregistered category is quite narrow.

Need PI for your accounting practice?

If you’re an accountant, bookkeeper, or BAS agent looking for PI insurance that meets your professional body requirements, we can help. Tank Insurance places PI for financial services professionals and understands the specific requirements of CPA, CA ANZ, IPA, and TPB.

Call us on 02 9000 1155 or email [email protected].

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This is general information only and does not take into account your objectives, financial situation, or needs. You should consider whether the information is appropriate for you and read the relevant Product Disclosure Statement (PDS) before making any decisions about insurance products.