What does my PI insurance cover? Am I protected should I land myself in trouble?
As a bookkeeper, it is important that you know what you are and what you are not covered for in the event of a situation leading to a claim.
There are many different insurance policies out there so it is important that you do your research and make sure you choose what is relevant for you and your services. When looking, there are a number of factors you need to consider to work out what policy is best for you. Are you a registered Tax or BAS Agent? Do you provide a consultation service of software advice?
Key things you need to ensure are covered are:
- Official enquiries or investigation costs including: ATO, ASIC, APRA, ACCC and Tax Practitioners Board
- Bookkeeping and Payroll (Calculating, Processing, Reconciling and Reporting)
- All ASIC reporting and registration activities
- Retroactive Cover - Covers you for all past work provided that you have had continuous PI Insurance
- Operating as a registered BAS Agent (including BAS preparation and advice, GST advice, Payroll services and PAYWG withholding calculation and advice)
ICB’s recommended insurance provider, Insurance Made Easy, cover you for all of your bookkeeping needs, which includes but not limited to:
- Employees/Contractors are automatically included as well as all directors
- Professional negligence and wrongful act
- Data file management (including backup management and file location management)
- Supply, Installation, Configuration and Training on commercially available software
- Advancement of defence costs
- Run off cover for seven years. After you cease trading you remain covered with no further premium payments
- Fidelity (misappropriation of your money by staff member)
- Dishonesty and fraudulent activities of your employees/contractors
- Defence and legal costs automatically included over and above the level of cover selected
- Breaches of Competition and Consumer Act 2010 and Related Legislation
- Unlimited Reinstatements
- Privacy Remediation Costs
- Recovery of Professional Fees
Advising clients generally and providing information about their legal obligations is acceptable and recommended. Advising clients specifically about an employee situation, HR matters, or employment law is not a bookkeeper/BAS Agent role. These matters need to be referred to a specialist with the relevant training. Note: ICB are currently investigating an improved level of cover for HR matters.
Checking the award for provisions to ascertain that you are paying the employees correctly is acceptable. For example, some awards provide for more personal leave than the NES, some provide for extra redundancy pay and so on. However, deciding which award applies to a client’s employees is not a bookkeeper/BAS Agent role, the business owner must get advice directly from Fairwork or an employment law specialist.
For more information head to Insurance Made Easy information page on the ICB website and click here for details on the TPB's PI requirements, you can download Insurance Made Easy brochure here and also PI FAQ's can be downloaded here.