A Tax Practitioners Board (TPB) rule that advisers giving tax advice need at least $2 million of professional indemnity (PI) cover for any one claim is expected to have little impact on insurers.

The new regulations were issued by the TPB on July 1.

The rule applies to advisers with revenue of up to $2 million. Those with greater turnover need cover equal to expected revenue.

Marsh Managing Principal Julianne Harvey told insuranceNEWS.com.au the board has tried to mirror the previous requirements under the Australian Securities and Investments Commission’s Regulatory Guide 126.

“Insurers are already covering this industry for this activity. It is not the activity that is changing, just the regime they are doing it under.”

However, Ms Harvey says the rules do differ in a couple of areas ­– advisers will have to watch out for any tax advice exclusions and make sure contractors are covered.

Allianz Global Corporate & Specialty National Manager Professional Indemnity Max Broodryk agrees the changes will have minimal impact.

“Risks associated with the provision of tax advice are generally lower compared with the other areas of financial advice being provided, such as where clients might invest their money,” he said.

“Allianz’s PI policies have always provided an equivalent level of cover to that now required.

“However, in light of the new requirements Allianz included a specific extension to our PI policies for financial planners, which was added for no additional premium.”