Do bookkeepers need professional indemnity insurance?

Key points

• The Tax Practitioners Board's own examples put bank reconciliations on one side of the line and payroll that applies tax law on the other.
• A registered BAS agent's cover must total at least $250,000, $500,000 or $1,000,000 across all claims in the policy period, set by turnover excluding GST.
• Work under a registered tax or BAS agent who instructs and supervises you, and neither registration nor the insurance requirement applies.

Does my payroll and BAS work mean I need cover?

It does when the work is a BAS service done for a fee. A BAS service is work where you interpret or apply a BAS provision yourself. Recording what someone else decided is not one. The Tax Practitioners Board's own examples show where the line falls:

• Generally not a BAS service: bank reconciliations, or entering data with no part in working out the figures on a client's activity statement.
• Generally a BAS service: a payroll service that applies tax law, including setting up or reporting through Single Touch Payroll software, calculating leave payments and the withholding on them, or confirming the figures that go on an activity statement.

Coding can fall on either side. It is not a BAS service when a registered agent instructs and supervises the work, and it is one when the coding needs you to apply a BAS provision yourself.

If your work sits on the second side and you are paid for it, our page on professional indemnity for accountants, bookkeepers, tax agents and BAS agents sets out the cover we arrange for that work.

Why might a bookkeeper need professional indemnity insurance anyway?

Say you are not registered and do not need to be. You still have commercial reasons to hold cover. One is the client: a payroll or reconciliation error can cost a client money and lead to a claim against you. Client engagement terms, software partner programs and association membership can also be reasons to hold it.

How the cover works, and why the date a claim is made matters, is on our professional indemnity insurance page.

Two other risks sit beside the advice risk. Injury and property damage claims usually belong to public liability insurance, and some of the professional indemnity policies we place exclude them unless they arise directly from a breach of professional duty. Client data is a different policy again: cyber insurance.

How much professional indemnity insurance does a BAS agent need?

The law makes professional indemnity that meets the Board's requirements a condition of registering and of renewing. It stays a standing obligation for as long as you are registered.

BAS agents use the same table as tax agents, banded on turnover. Each figure is the least cover you may hold. Your policy's limit must reach it as one total for all claims in the policy period.

A registered BAS agent turning over $70,000 needs at least $250,000. At $80,000, the minimum is $500,000.

The Board also sets conditions on the legal costs of defending a claim, on the excess you pay towards each claim, and on how far back the cover must reach for past work. Our accountants page carries those, with the professional body rules that can set a higher minimum.

One bookkeeping practice we insure pays $939 a year for a $1 million limit, as at December 2025, the whole policy with our fee.

Frequently asked questions