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Professional Indemnity Insurance: Why Bookkeepers Need It

Aug 05, 2022
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Insurance Claim Business Insurance Professional Indemnity Insurance Professional Services Insurance Bookkeeping Insurance Accountants Insurance

Finance is the backbone of every company. While some may not agree that money makes the world go round, we cannot deny that it is what keeps a business running. Profit, taxes, and losses–it's important that these financial aspects are continuously kept track of, which makes the role of bookkeepers vital to any organization.

How Professional Indemnity Insurance Protects Bookkeepers

Balancing ledgers, maintaining records, handling payroll, and generating invoices are only a few of the tasks bookkeepers are in charge of. They also document financial transactions and offer assistance in preparing taxes, allowing them to get an accurate picture of a company’s current financial state. In addition, bookkeepers are responsible for paying companies’ taxes and bills on time, which is important to avoid disputes with tax authorities, government regulatory agencies, and clients.

As with all other professions, bookkeepers are exposed to risks that may put their livelihood on the line. Because their work primarily involves finances, monetary losses resulting from errors or negligent acts they commit expose them to legal liability. Here are some example instances that put them at risk:

Overstating income due to errors in the invoice generation
Jeopardizing future payments from big clients because of improper account receivables tracking
Misplacing clients’ financial records
Losing out on possible tax deductions due to carelessness
Missing a double posting because of failure to reconcile accounts monthly

In the event that a company files a lawsuit because of a loss resulting from negligence or errors, Professional Indemnity insurance can cover the legal costs incurred from defending your livelihood or business. Furthermore, clients may still pursue claims against you even if you did not commit a mistake, and Professional Indemnity insurance can help pay for expenses that you will otherwise shoulder if you are not protected.

What to Consider When Choosing a Professional Indemnity Insurance Policy

Numerous providers offer Professional Indemnity insurance. Here are some questions to ask your insurance broker before choosing a plan:

What risks am I exposed to and what personal and professional assets do I need to protect?
Does this policy meet the Tax Practitioners Board's requirements?
Will this product cover claims arising from work I have done in the past?
Does this cover lawsuits against me after I retired from being a bookkeeper?

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

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Business Package

Purchase up to six products under one Business Insurance Package.

Details Get a quote!

What risks am I exposed to and what personal and professional assets do I need to protect?
Does this policy meet the Tax Practitioners Board's requirements?
Will this product cover claims arising from work I have done in the past?
Does this cover lawsuits against me after I retired from being a bookkeeper?

QUESTIONS? JUST ASK

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Countless coverage options tailored for bookkeepers are available today. Getting advice from an insurance broker will make the process of narrowing down your choices and selecting a policy easier. Reach out to one today.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

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