Issued: 25 November 2020

Last modified: 20 January 2021

View the resources from our webinar Professional indemnity insurance, held 25 November 2020. Professional indemnity (PI) insurance is an ongoing registration requirement. Watch this webinar to find out why PI insurance is important, what cover you require and what your policy should cover and include.


Webinar recording

Questions and answers

Adequate cover

Yes, as long as the PI insurance meets our requirements and covers all tax agent services (this includes BAS services and tax (financial) advice services) provided on behalf of the registered tax practitioner. 


Yes, any tax agent services (including BAS services and tax (financial) advice services) provided on your behalf must be included in your policy, unless those services are covered by another tax practitioner's PI insurance cover. This includes any services that are outsourced.


You don’t necessarily need multiple policies. As long as all entities providing tax agent services (including BAS services) on your behalf and the company’s behalf are covered, one policy will meet our requirements.


Cyber insurance cover is not a requirement of the TPB, however we do recommend you assess your individual practice’s needs. Tax practitioners hold large amounts of confidential information about clients which may be accessible electronically. Data is an increasingly valuable resource that is likely to be targeted or inadvertently disclosed through security breaches. 


This is something you should talk to a broker about. We don’t have a minimum number of years requirement for run-off cover.


We can’t comment on particular policies, however your cover must be provided by:

  • an APRA approved insurer

  • an insurer who is not APRA approved, but otherwise permitted to provide insurance in Australia under the Insurance Act 1973

  • an unauthorised foreign insurer if they are providing insurance in accordance with Part 2 of the Insurance Regulations 2002, or

  • other insurance providers as approved by us.


We conducted extensive consultation and research in developing our minimum PI insurance cover requirements. This included, looking at the requirements of other government regulators (for example the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority), consulting with industry bodies such as the Insurance Council of Australia and the National Insurance Brokers Association. We also researched market trends and availability.

Who should be covered?

A contractor providing tax agent services on your behalf needs to be covered by your policy, just like employees, unless they are already covered for the services they are providing, on your behalf, by another policy. 



It’s important we recognise the limitations of PI insurance as a consumer protection mechanism. PI insurance can protect consumers indirectly and it is not a guarantee that compensation will, in fact, be paid. 

It also protects the tax practitioner against the risk of financial losses arising from acts, errors, omissions and other misconduct by the tax practitioner in the provision of tax practitioner services. For example, this might occur where the tax practitioner is otherwise unable or unwilling to compensate a client in respect of a loss caused by the tax practitioner and there is, or would be, a liability to do so. 

The cover that we require is not necessarily intended to cover what a client might perceive as a loss in every circumstance. For example, it is not intended to cover what a client thinks is a loss because a tax refund or liability does not meet their expectations.

While PI insurance does not provide direct protection to clients, there are safe harbour provisions, administered by the Australian Taxation Office, which may provide some consumer protection against penalties in some circumstances.

Notifying us of your cover

When applying for registration initially, you will need to satisfy us that you maintain PI insurance, or that you will maintain PI insurance, that meets our requirements within 14 days of becoming registered. 

Once you are registered with us, you will need to update your PI insurance details whenever there is a change in your policy, including every time the policy is renewed. You can do this via My Profile or on your online renewal application or annual declaration form. 

We may ask you to provide a Certificate of Currency (or if unavailable, a Policy Schedule) in relation to your PI insurance at renewal, or when requested.


View our video – ‘Updating your professional indemnity details walk-through’ which provides instructions on including your employer details.


If an applicant for registration doesn’t satisfy us that they maintain appropriate PI insurance, or that they will maintain appropriate PI insurance once registered, we won’t grant their registration.

If a tax practitioner fails to maintain PI insurance cover during their period of registration, their registration may be terminated on the basis that they cease to meet an ongoing registration requirement, under Tax Agent Services Act 2009.

Alternatively, if the tax practitioner fails to maintain adequate PI insurance during the period of their registration, we may sanction them for a breach of the Code of Professional Conduct. Depending on the circumstances, the sanctions available to us range from written cautions to suspension or termination of a tax practitioner’s registration.

Authorised insurers

We don’t approve particular policies or PI insurance providers. If you’re a member of a recognised professional association, they might be able to recommend a policy for you. 


If you wish to apply for alternative arrangements in relation to your PI insurance requirements, you’ll need to lodge an application and ensure you include the correct information. This includes addressing the following:

  1. Which tax practitioners and representatives will be covered by the arrangements?

  2. How the compensation arrangements the tax practitioner has in place do and do not meet the criteria for assessing adequate PI insurance?

  3. Describe any benefits, risks, or costs to clients arising from using alternative arrangements.

  4. Describe any circumstances particular to the tax practitioner or the industry sector which make these arrangements more appropriate than the TPB's general PI insurance requirements.

  5. Confirm that the tax practitioner will advise us if the alternative arrangements are cancelled, varied or become unavailable for any reason.

  6. State whether the compensation arrangements have been approved by ASIC.

We will generally ask for an expert report (e.g., an actuarial report) to be submitted with the application to assess whether the alternative arrangements provide a satisfactory level of compensation to clients, having regard to our policy objective and requirements.

Contact us to submit an application through our general enquiry form.