Accountants slam lack of useful PI cover
Professional indemnity (PI) prices are at an all-time high, and now the ultimate number-crunchers, accountants, are digging their heels in and demanding better cover.
CPA Australia CEO Greg Larsen says PI policies without Trade Practices Act (TPA) cover are “Clayton’s policies, leaving professionals without indemnity for one of the most common forms of legal actions”.
“If this leads to more professionals deciding against holding PI insurance, and opting instead to be ‘men of straw’, the public will ultimately suffer as they will have little or no redress for their economic losses,” he said.
Mr Larsen says TPA policy exclusions are ridiculous because in about nine out of 10 cases involving accountants, plaintiffs claim that the professionals have been deceptive and misleading in their conduct, “which could represent a breach of Section 52 of the Trade Practices Act or its state equivalent”.
“This is a further tightening of the noose for accountants and other professionals who are experiencing a hard insurance market of high premiums, increased excesses and widening exclusions,” he said.
CPA Australia says accountants have seen premium hikes of more than 500% in their PI cover over the past 18 months, as well as increased excesses and withdrawal of some high risk cover. It said policy wordings have become so broad that it now can sometimes relate to “all tax advice”.
The group wants its members to support the concept of nationally consistent proportionate liability and professional standards legislation.