Setting up a practice, or renewing your registration? Professional indemnity for accountants.

It had $3 million for all claims in the year and a $2,500 excess, the part of each claim you pay yourself. Its limit is below the $2 million most practising certificates ask for, so a practice under its body's rules would need cover at the higher limit, and its quote would start there.

A policy pays defence costs, the cost of fighting a claim, either on top of the limit or from inside it. A $1 million policy with costs inside leaves less for your client's loss than $1 million with costs on top.

Insurers write one kind of professional indemnity policy for a range of professions, and call it a miscellaneous professions policy. Of those policies we have compared, some pay defence costs in addition to the limit, some pay them from inside it, and on others the schedule, the page that sets out your terms, decides, so we check which one a quote is before it is compared on price.

Accountant is not a protected title in Australia, so what you must hold depends on what you practise under. Almost every practice we look at is under more than one set of rules and has been sized against one of them. Before any cover is placed, we find every minimum that applies to your practice.

Your accounting body. Your body's by-laws require professional indemnity if you hold a Public Practice Certificate from CPA Australia, a Professional Practice Certificate from the Institute of Public Accountants, or a Certificate of Public Practice from Chartered Accountants Australia and New Zealand, known as CA ANZ. It is the body's own rule. A member in salaried work who does not practise publicly is not caught by the by-laws.

Each body sets its minimum on a different measure.

Tax or BAS agent registration. Cover that satisfies the Board's requirements is a condition of registering and renewing, and a duty for as long as you stay registered. Tax agents and BAS agents share one table, set on turnover excluding GST. Each figure is the least cover you may hold, measured as an aggregate: one total for all claims in the policy period.

These are the Board's own figures, and the Board can change them itself. The Board also wants legal and defence costs outside the limit or paid on top of it, unless the limit is raised enough to absorb them. It caps the excess at 4 per cent of turnover, or $1,000 where 4 per cent comes to less.

A bookkeeper whose work is a BAS service registers with the Board too, and our bookkeeper guide sets out when that applies.

An AFS licence. Advice on setting up or winding up a self managed super fund can be financial product advice, and it needs an Australian financial services licence or an authorisation under someone else's. A licensee who advises retail clients must hold adequate professional indemnity, unless exempt. ASIC's guidance expects $2 million for any one claim and in the aggregate where your retail-client revenue is $2 million or less, rising with revenue to $20 million, and as the licensee you decide whether that is enough for your practice.

Take a practice with $600,000 of turnover, a CPA Australia practising certificate, and a Tax Practitioners Board registration.

A $1,000,000 policy meets the Board and falls short of CPA Australia. Add a limited licence for self managed super fund advice and a third figure applies, measured on retail-client revenue. Under CA ANZ, one large engagement can lift the minimum for a practice whose turnover has not moved. A practice that has met its Tax Practitioners Board minimum and holds a practising certificate is very often carrying less than its professional body requires.

The rules also differ on the legal bill. CPA Australia and the Institute of Public Accountants want defence costs outside the limit, or the limit lifted to make up for them. CA ANZ wants at least 25 per cent more cover where costs sit inside.

The three bodies and the Board each cap the excess in their own way: a share of turnover or fee income, a share of the policy limit, a set amount for each principal, or whichever of two tests is lower. Any of these minimums can be changed by the body, the Board, or ASIC without any change to the law.

Run-off is cover that keeps answering claims about your past work after the practice stops and the policy ends. If you belong to a body and are also registered with the Board, the body's seven years applies to you. As a general indication, 12 months of run-off costs about the same as the last year's renewal premium, and 7 years roughly 2.5 times that.

Professional indemnity answers a claim made and notified while a policy is in force. Cancel the policy when you retire, and a claim that arrives later finds no cover. Our professional indemnity page explains how that timing works.

On some of the miscellaneous professions policies we have compared, cover after a sale or merger runs only to the policy's expiry. On others, up to 84 months can be arranged. The detail is in what happens to your professional indemnity cover when you switch insurers or stop work.

If a client says your work cost them money and the policy is one we look after, the claim does not sit on your desk alone. A specialist claims manager on our team manages it with the insurer, and the broker who knows your practice stays involved and keeps watch. The claims manager chases the insurer when it goes slow and challenges a decision where the policy and the evidence point to a different outcome. You have fewer calls to make and fewer letters to answer while the practice absorbs it. The insurer makes the decision, and we tell you where the claim stands at each step.