As a small to medium accounting business, taking out insurance can feel a little like trying to find something to watch when you’re subscribed to multiple streaming services. The difference is that at the end of the search, instead of watching a movie or a TV show, you buy what often feels like a ‘grudge purchase’.
This is a perfectly normal dynamic given the range of providers, brokers and policy types out there. However, when it comes time to renew insurance, it does mean that many accountants base their decision on a single metric – price. Of course, price is very important, but when something goes wrong and you need insurance, you can find that single-metric decisions lead to less than ideal outcomes.
Here are some factors to consider when comparing insurance policies and providers.
What to look for
A lot of accountants have questions about whether their Professional Indemnity (PI) policy offers legal coverage. For example, they want to have experts guide them should a client accuse them of providing poor advice. Aon can arrange it so that legal costs are automatically covered in your policy, in addition to any claims costs.
When switching policies, it’s important to find out if you have retroactive cover – i.e. can and will be covered for past work. The last thing you want to find out is that the new policy you’re so happy with will only cover you going forward. If a retroactive date is imposed, it’s important to be aware of the limitation of cover. This could leave your practice exposed to any claims/circumstances arising from prior work.
Run-off cover is sometimes a feature under PI policies and should be considered by any business involved in providing advice as part of their service. Run-off cover continues to provide cover after you stop practising or retire and is intended to provide cover for your past professional services. Some providers will offer it automatically while for others it’s an optional extra.
Making a claim can be stressful, so you want adequate claims support, because the last thing you’d need is a subadequate or lengthy process. When selecting your broker, make sure they have a track record of being advocates during the claim process.
Making the right choice
As SME specialists for insurance for accounting businesses, with a seven-year partnership with CA ANZ, Aon understands the risks that CA firms face, and how to insure against them. Our team of Australian-based insurance experts are here to support you and give you the information you need to make the right insurance decisions for your business.
Find out more:
Aon is the Australian general insurance partner of the CA ANZ Member Benefits Program and provides exclusive benefits to CA ANZ members. To find out more and get a quote, go to aon.com.au/ca.
This is an edited version of an article that originally appeared on aon.com.au
© 2022 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.