PI insurance deadline approaches
From 1 July 2011, generally, registered tax and BAS agents must have professional indemnity insurance (PII) cover that meets the Tax Practitioners Board’s (TPB) minimum requirements.
Dale Boucher, Chair of the TPB, today reminded all registered tax and BAS agents that they need to notify the TPB of their PII coverage arrangements by the 1 July 2011 commencement date for this requirement.
“As with many professions in our community this type of insurance cover is considered good business practice. Consumers, by and large, expect this type of cover when paying for professional services, whether this is for tax advice, Business Activity Statement (BAS) services or other advice.”
Better protecting agents and consumers
“The Board is working to ensure professional standards and to establish appropriate consumer protection measures. Having national requirements for PII that are set by the TPB will improve compensation arrangements within the tax practitioner profession,” Mr Boucher said.
“Many agents already have PII cover, however there are many who do not; we want to see this important form of protection taken up across the tax practitioner community generally.”
As in any profession, clients might suffer loss due to an act, error or omission by an agent. This type of insurance will better protect agents if professional negligence claims are made against them by their clients. PII provides the financial backup to ensure funds are available to compensate clients in certain situations.
Meeting the TPB’s minimum requirements
Mr Boucher said that it is an agent’s responsibility to determine what is adequate PII cover for them.
They should assess their specific business and risk requirements, speak with their broker, insurer or their professional associations and arrange PII cover that is appropriate for their individual circumstances.
A 12 month implementation period is in place until 1 July 2012. Where a tax or BAS agent already has
PII cover that may not meet the TPB’s requirements, the policy can continue during this implementation period. However when the policy lapses, or by 1 July 2012, whichever occurs first, agents will need to obtain cover that meets the TPB’s PII requirements, assuming that it does not do so already.
In some instances agents will not need to meet the TPB’s PII requirements. Agents, such as employees, who are covered by another entity’s PII policy are a good example.
“Where individual cover is not required, agents will still need to notify the Board that this is the case. We still need to know that there is an appropriate arrangement in place,” Mr Boucher added.
“If you do not notify the TPB of your PII status you may be in breach of your professional obligations. This can result in the TPB issuing you with a written caution, order, suspension or termination of your registration, for a breach of the Code of Professional Conduct that applies to all registered agents,” Mr Boucher advised.
Agents to notify online
A letter and written notice have been posted to all registered agents asking them to notify the TPB of their PII coverage arrangements. A PII online notification form will be available at www.tpb.gov.au from Monday 9 May 2011.