Accountants

Accountants Professional Indemnity

Cooper Professional Risks Pty Ltd has chosen not to have a facility for this area and at the present time for good reason. Accountants is one of the most competitive areas of Professional Indemnity at the moment. Our clients are taking advantage of this!

The competition between insurers is intense and is constantly changing causing premiums to be unrealistically low. If we had a facility, we would lock ourselves into an agreement for twelve months on particular rates that were pretty good at the time they were negotiated but can quickly become uncompetitive. As facilities are meant to be exclusively supported, it is difficult to adjust to the competition. So we act as your insurance broker ready to respond to all the various market changes as they happen.

Further, if you are a member of the Institute of Chartered Accountants, we are listed on their web site and we are obligated to make sure we obtain for you cover that is compliant with their rules and regulations.

Click here for our Institute of Chartered Accountants listing

Competition

We at Cooper Professional Risks have been successful in building and retaining our Accountancy client numbers by:

  • Demonstrating expertise and knowledge about the available covers and which may suit.
  • Market Security – many of our competitors schemes use obscure insurers. Will they pay claims?
  • Demonstrating we are Broking by offering alternate insurer’s premiums.
  • Using alternate insurer’s terms to negotiate with.

A proposal form needs to be completed

There can either be a specific Accountants proposal form or a specific Accountants Addendum is attached. The proposal form varies from other occupations in that it seeks to identify the percentage of activities performed in the following areas:

  • Accounts Preparation and Bookkeeping
  • Tax
  • Audit
  • Receiverships, Liquidations and Bankrupt
  • Management Services
  • Insurance Agencies/Advice
  • Other

And then it will further clarify these activities by seeking to identify how much makes up the following for each:

  • Non-Profit Organisations
  • Do it yourself Superannuation
  • Financial Institutions
  • Private Companies/Partnerships
  • Unlisted Public Companies
  • Listed Private Companies

Further clarification may be sought in these areas:

  • Business Valuations
  • Mergers & Acquisitions, Restructuring and related activities
  • Investment Advice
  • Security Dealer/Authorised Representative of a Financial Planner
  • Secretarial Services


Each activity attracts different rates, or perhaps be tolerated (if incidental ie. less than 5%) or can be excluded altogether by the insurer.

The other area that will often attract the need for an additional addendum is in the area of Investment Advice/Security Dealer/Financial Planner.

This used to be a difficult area but under changes to the Financial Services reform act, principal dealers are responsible for covering all their authorised representatives, so this is taken care of, unless the Accountant gets their own dealer licence. The worse case scenario then is that the Accountant will require two PI policies, one for Accounting work and one for a Financial Planning licence.

Some features provided by insurers

When we are in a competitive market environment, it is not just price that can determine the differences between insurers, but also the policy features provided. Some that are found to be more unique to the Accountants wordings are as follows:

  • Multiple Reinstatements - The Accountants PI policy is one of the few that allows multiple reinstatements. While most offer just one, some will give two, three and even unlimited reinstatements.
  • Exclusive of costs and expenses - Most insurers will give a “costs exclusive” excess where fees generated are under $2,000,000, which means that you do not pay the excess towards the legal costs incurred initially, only if damages are incurred. This can be useful if just defending allegations only.
  • Unlimited retroactive date - Most insurers will provide an unlimited retroactive date which will pick up any work performed previously, not just work performed after the inception date. However for new businesses or those that have let cover lapse, there is no guarantee of this particularly as the market hardens.
  • Fidelity - Many insurers are automatically including Fidelity cover without additional charge. Please note this has to be Professional Indemnity related. Ie handling a client’s trust fund. It does not cover external theft or internal theft of payroll or property.

In summary

The Accountants Professional Indemnity area is currently enjoying its most competitive period which is resulting in much broader coverage than before and much cheaper pricing.

Most insurers would like to write Accountants but only four or five are competitive at the present time.

However, price is not everything and there can be some limitations in the cover, particularly in the area of Investment Advice and Financial Planning, as well as activities such as Auditing, Management Advice and Insolvency.

CPR does not have a facility for Accountants as the goal posts keep moving and we have to make sure we are always providing the best deal for the client.

When you do think you have the best deal, double check that the cover fits in with your activities. It could mean having a second policy to fill the gap.

Who can help?

An insurance broker's role is to act as your representative and work in your interests, seeking the best cover at the best price for you from market knowledge.

We are listed with the Institute of Chartered Accountants as Broker who meets their professional standards and requirements for their members. Check us out here  Institute of Chartered Accountants

How much minimum cover should you have under the limited Liability scheme? Click here for guidance

Call a good one. Call CPR – Experts who will save you.

Proposal Forms if you would like to apply for cover:

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