The Indemnity Gap Most Accounting Firms Miss

But if a client challenges your advice, or claims your guidance influenced a decision that went wrong - is your practice adequately protected?

Professional Indemnity Insurance for Accountants: The Risk Is in the Everyday Work

Professional Indemnity (PI) claims against accountants are rarely about intentional wrongdoing. More often, they are about reliance - a client acts on advice, the outcome differs from expectations, and twelve months later the firm is facing a formal complaint and a legal bill. 

This is not simply an insurance observation; it is a reality many accounting professionals recognise. As Drew Fenton CPA, Managing Director of Fenton Green & Co, told CPA Australia: "Every time there is a downturn in the economy, professional indemnity claims go up. Everybody knows accountants have PI, so if money is lost, somebody will cast their eye over the work the firm has done."

PI claims are long-tail liabilities that can take three to six years to resolve, meaning a practice can be carrying exposure from work completed years ago. 

What Claims Actually Look Like: A Specialist’s View

Polina Kesov, Director at ii-A Insurance, is the advisor behind the advisor. She sees a consistent pattern across professional services firms in Australia. 

According to Polina Kesov, Director at ii-A Insurance, many accountants are surprised by where professional risk actually sits: "Accountants are often surprised by the nature of claims. It is rarely fraud or negligence. More often, it’s a tax position interpreted differently after the fact, or advice given in a casual conversation that a client later relies on to make a formal decision. The exposure lies in the everyday work."

It Could All Come Undone with the Wrong Insurance 

CPA Australia and CA ANZ mandate a minimum of $2 million PI cover for public practitioners, scaling higher based on services and fees. But mandatory does not mean adequate, and adequate when the practice was smaller does not mean adequate now. 

Common gaps ii-A identifies include:

• Cover arranged when the firm was smaller and never revisited since
• Generic wording that does not reflect advisory, SMSF or consulting work
• Policies quietly renewing while the business keeps growing
• Expanded services sitting completely outside the insured scope

At claim time, those gaps are not oversights but the reason a payout is reduced, or declined. 

A Strategic Partner, Not Just a Broker

Accountants spend their careers protecting other businesses - their own practice is usually last on the list. ii-A is the specialist saved under 'Insurance' in your phone, working with firms that have grown, evolved and built practices that deserve cover to match what they’ve become. 

Book an obligation-free review with ii-A to check if your cover still fits.