Accountants have been navigating the challenges of the economic climate for their clients, but some have been so busy they’ve put their own insurance requirements on the backburner. A 2022 report by APRA found professional indemnity insurance has soared by 76% since March 2019, putting many off taking out policies.

Aon Affinity managing director Lisa Henderson says there are five sure-fire ways they can ensure they’re properly protected.

1. Client claims

It’s important to remember that even experts can make mistakes.

“Professional indemnity is a safety net that protects an accountants’ practice,” Henderson tells Acuity. “If a client is unhappy with the advice they’ve received, they might look to make a claim against their accountant. “We’ve worked closely with CA ANZ members to develop a professional indemnity policy specific to their needs that caters to limits of indemnity and other important details associated with the accounting risks.”

2. Seek a specialist

Negotiating the complex world of insurance can be time consuming and confusing. “If you’re a small business, why wouldn’t you hand it over to a specialist?” Henderson asks.

“When an insurable event happens, it’s extremely stressful, and a broker can manage the whole process for you.”

3. Value over costs

Accountants know better than anyone that weighing up cost against value is a critical, albeit difficult task. Henderson warns that we’re living in a ‘hot market’ and all industries are experiencing both rising insurance premiums and an increasing number of claims.

“On top of that, we’re seeing more litigation, and it’s impacting insurance prices. We understand the desire to find the cheapest policy - but making sure you get the right cover is a question of value.”

“Making sure you get the right cover is a question of value.”

4. Beware of underinsurance

The heightened pressures mean brokers have detected a concerning trend in underinsured businesses. Last year’s catastrophic floods highlighted the dire consequences of not having the right protection. “Insurance is something you need to adjust as your business changes - it’s not simply the wider economic conditions that accountants need to consider. Expanding practices, hiring new staff, opening new locations, and even putting in place new IT systems can all affect premiums.”

5. Cyber risks

If the concerns about the wider economy weren’t enough, accountancy firms are facing a dramatic increase in cyber attacks due to the amount of sensitive information they hold for clients. The Optus and Medibank hacks last year made the headlines, but accountants are experiencing lesser events daily. “Once your client’s data is breached, your brand can be seriously impacted. In Australia, only around 20% of SMEs have cyber insurance, compared to more than half of larger businesses.”

Aon’s new appointment

Aon has been appointed CA ANZ’s preferred PI member benefits partner for practitioners. As SME specialists for all the typical insurance needs of chartered accountants, Aon delivers industry-specialised insurance advice and service, and its teams find the right policy for the individual needs of chartered accountants. Visit www.aon.com.au/ca to find out details of AON’s new offer for CA ANZ members.

© 2023 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL 241141 (Aon)
The information contained in this communication is general in nature and should not be relied on as advice (personal or otherwise) because your personal needs, objectives and financial situation have not been considered. Before deciding whether a particular product is right for you, please consider your personal circumstances, as well as the relevant Product Disclosure Statement (if applicable), Target Market Determination and full policy terms and conditions available from Aon on request. All representations in this communication in relation to the insurance products Aon arranges are subject to full terms and conditions of the relevant policy. Please contact Aon if you have any queries. The Professional Indemnity Insurance for members of Chartered Accountants Australia and New Zealand is arranged by Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL 241141 as agent for the insurer, Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance. If you purchase this insurance, Aon will receive a commission that is a percentage of the premium. Further information can be provided upon request.