Professional Indemnity Insurance for Accountants and Bookkeepers NZ
Professional indemnity insurance pays to defend and settle a claim that your accounting, tax or bookkeeping work cost a client money. For chartered accountants in public practice, Chartered Accountants Australia and New Zealand (CA ANZ) requires current and appropriate cover. Bookkeepers and other accountants are usually asked by clients, banks or software partners, not by law.
In short
- Chartered accountants applying for a Certificate of Public Practice need current and appropriate PI in place under CA ANZ's New Zealand rules. CA ANZ sets what counts as appropriate.
- Bookkeepers and tax agents without that certificate are usually asked for PI by a client contract or a firm they subcontract to. Check the rules of any body you belong to.
- PI is claims-made. Ask about run-off before you retire, sell or switch.
- The costly claims are late filings, missed deadlines and wrong advice, plus the cost of defending a complaint you win.
For the general rules on PI, see the professional indemnity guide.
Who asks accountants for proof of cover
- CA ANZ, for current and appropriate PI when issuing a Certificate of Public Practice
- Larger clients with PI in their supplier terms
- Accounting firms you subcontract to
- Lenders who rely on your reports or sign-offs
- Software and franchise networks that list partners
A late filing
A GST or annual return goes in after the due date and the client faces penalties.
Tax advice questioned
A client restructures on your advice and Inland Revenue takes a different view.
Client data stolen
IRD numbers, bank details and payroll files lost to phishing or a stolen laptop.
Office down in tax season
A fire or flood stops the practice working at the worst time.
Work out what to raise
Tick what applies to you
- I am a chartered accountant in public practice
CA ANZ asks for current and appropriate cover for a Certificate of Public Practice.
Covers to raise: Professional indemnity
- I file tax, GST or annual returns for clients
Covers to raise: Professional indemnity
- I run bookkeeping or payroll
Covers to raise: Professional indemnity, Cyber
- I advise on structures, trusts or business sales
Covers to raise: Professional indemnity
- Lenders rely on my reports or sign-offs
Covers to raise: Professional indemnity
- I hold IRD numbers, bank details or payroll files
Covers to raise: Cyber
- Clients visit my office
Covers to raise: Public liability, Premises, stock and interruption
- I plan to sell, merge or retire
Claims-made cover ends with the policy, so run-off is worth raising.
Covers to raise: Professional indemnity
What these covers do not pay
- Tax, interest or penalties a client would have owed anyway are not usually paid.
- Your own fees and the cost of redoing your own work are generally excluded.
- Dishonest acts by you or your staff are typically excluded.
- Work outside the services you described to the insurer may not respond.
- Regulated financial advice given outside your licence may sit outside the policy.
General information only. Whether a cover responds depends on the policy wording.
Which clause is in your contract?
Professional standard
You agree to work with reasonable skill and care, or to a named industry standard. If the work falls short, that is the test a client may use against you.
Covers to raise: Professional indemnity
What it does not decide: It does not decide whether a claim for falling short is covered. Professional indemnity wordings differ on what is excluded, such as guarantees, fee disputes and known issues.
Limitation of liability
A cap on what you could owe the client if something goes wrong, often tied to your fees or a set figure. It can also exclude certain losses such as lost profit.
Covers to raise: Professional indemnity, Public liability
What it does not decide: It does not decide what your insurance pays. A cap in the contract may sit below or above your policy limit, and some claims, such as personal injury, may fall outside it.
Data and privacy duties
The contract asks you to protect client information, keep it secure and report a breach. It often refers to the Privacy Act 2020, which has its own duties on notifying serious breaches.
Covers to raise: Cyber, Professional indemnity
What it does not decide: It does not decide whether a breach is insured. Cyber policies differ on response costs, privacy claims and fines, and some penalties cannot be insured at all.
General information, not legal advice. The full clause and the policy wording decide how it applies.
Check your certificate of currency against the contract
Clients and main contractors in this trade ask for:
- PI named in a larger client's supplier terms
- Evidence of PI for firms you subcontract to
- Evidence of PI for lenders who rely on your reports
- A certificate for software or franchise networks that list partners
Check the insured name, limit and dates match the contract. The policy wording, not the certificate, decides what is covered. How a certificate of currency works
What each cover may pay, and what it usually does not
Professional indemnity
- May respond to
- Defence and settlement of a claim that your work or advice cost a client money.
- Common trigger
- A missed deadline, a filing error or advice that did not hold up.
- Usually not covered
- Tax the client owed anyway and the cost of redoing your own work.
Cyber
- May respond to
- Incident response and restoring systems after a breach.
- Common trigger
- Phishing, ransomware or a stolen laptop.
- Usually not covered
- Upgrading your security afterwards.
Public liability
- May respond to
- Injury or property damage involving a client at your premises.
- Common trigger
- A client slips or trips at your office.
- Usually not covered
- Financial loss from your advice.
Premises, stock and interruption
- May respond to
- Office contents, computers and lost income after a fire or flood.
- Common trigger
- Fire, flood or storm damage to the office.
- Usually not covered
- Wear and tear and losses outside the policy's listed events.
If something goes wrong
A return goes in late
A GST return is filed after the due date and the client is hit with penalties they blame on you.
May respond: Professional indemnity
Have ready
- The engagement letter
- The filing record and due dates
- Emails showing when information arrived
Restructure advice questioned
A client restructures on your advice and Inland Revenue takes a different view.
May respond: Professional indemnity
Have ready
- Your advice letter and working papers
- The IRD correspondence
- Notes of client meetings
Payroll files stolen
A phishing email lets someone into your systems and client payroll files are taken.
May respond: Cyber, Professional indemnity
Have ready
- A list of affected clients and data
- Timeline of what you noticed and did
- Details of your software and backups
Flood in tax season
A burst pipe floods the office in March and the practice cannot work for a few weeks.
May respond: Premises, stock and interruption
Have ready
- Photos of the damage
- Inventory of equipment
- Recent income records
Typical examples, not real claims. ACC deals with most injuries, so an injury claim is mostly about property and legal costs. Whether a claim is paid depends on the policy wording and the facts.
Licence versus insurance
A licence is not insurance.
What the licence or register says
- For a Certificate of Public Practice, CA ANZ requires New Zealand members to have current and appropriate PI insurance in place.
- CA ANZ sets what counts as appropriate.
- Other accountants and bookkeepers should check their own body. Rules change, so read the current wording.
Source: Chartered Accountants Australia and New Zealand (CA ANZ)
Do accountants have to hold PI?
It depends on which hat you wear.
| Who | Is PI required? | Source |
|---|---|---|
| Chartered accountants in public practice | Yes. For a Certificate of Public Practice, CA ANZ requires New Zealand members to have current and appropriate PI insurance in place. | CA ANZ, Certificate of Public Practice |
| Bookkeepers | No general NZ law requires it. Check the rules of any body you belong to. | Your membership terms |
| Accountants who are not CA ANZ members | Check your own body. The requirement often arrives through a client or lender contract. | Your contract |
We read the CA ANZ page on 11 November 2026. Rules change, so read the current wording from the body that governs you.
What contracts and clients ask for
A PI limit is a number in a contract, so the clause matters more than any rule of thumb. Before you sign an engagement letter, check:
- Per claim or whole policy year? A $1m aggregate used up by one claim leaves nothing for the next.
- Run-off. Some clients want cover to continue after the engagement ends.
- A liability cap in the engagement letter. Without one, your limit may be smaller than what a client could claim.
- Who needs a certificate, and how soon. See the certificate of currency guide.
The question usually comes from larger clients with supplier terms, accounting firms subcontracting to bookkeepers, lenders who rely on your reports, and software or franchise networks that ask partners for proof of cover. We do not give a typical limit here, because it depends on your clients' contracts and how much money passes through your hands.
What claims look like
These illustrate how the cover responds. They are not records of real claims.
- A late filing. A GST return goes in after the due date and the client faces penalties.
- Wrong tax advice. A client restructures on your advice, and Inland Revenue later takes a different view.
- A coding error. A payroll or bank-feed mistake runs for months before anyone notices.
- Fraud you did not spot. A client's employee diverts funds and the client argues your reconciliations should have found it.
- A disputed forecast. A buyer or lender relied on figures you prepared.
The insurer's first job is the defence, including a claim that turns out to be unfounded. Most money claims can be brought up to six years after the act or omission, and up to 15 years where the claimant only discovered it late (Limitation Act 2010, s 11), so the timing of a policy matters as much as its limit.
Claims-made cover and run-off
The policy that responds is the one in force when the claim is made. Ask about:
- Retroactive date. Work before this date is not covered. If you switch insurers, ask that earlier work stays covered.
- Run-off. If you retire, sell or close, run-off lets claims about past work still be made. Ask what it costs and how long it lasts.
- Circumstances notified. Telling the insurer about a problem during the policy period can protect you if the claim comes later.
Selling or merging a practice raises this straight away, because the buyer will want to know what protects them.
What PI does not cover
Wording varies, so read the exclusions in the policy you are offered.
- Dishonesty and deliberate acts.
- Fines and penalties. Health and safety fines can never be insured (Health and Safety at Work Act 2015, s 29). Some regulatory defence costs sit under statutory liability.
- Bodily injury and property damage. That is public liability.
- Your own data loss and ransom costs. See below.
- A client's insolvency and trading losses. PI responds to your error, not to a client's business failing.
- Contractual promises beyond the law.
- Financial advice outside your licence. If your work crosses into regulated financial advice, check the policy and your licensing line up.
Cyber and privacy
An accountant holds IRD numbers, bank details and payroll files. A phishing email or a stolen laptop can become a breach without any accounting error. If a privacy breach has caused or might cause serious harm, the Privacy Commissioner says you must notify them, ideally within 72 hours of becoming aware (Office of the Privacy Commissioner). PI may respond to a client's claim that you were negligent with their information, but incident response and restoring systems are typically a cyber matter. See cyber insurance.
Other covers a practice looks at
- Public liability for clients visiting your premises.
- Business interruption if a fire or flood stops you working during tax season.
- Office contents and computers under a property policy.
- Owner and key person cover if the practice depends on you, via business protection.
The wider picture is in our business insurance guide.
What drives the cost
We do not publish prices. An insurer prices your details. It is likely to ask about the type of work (compilation and tax for small clients sits differently from audit or advice on sales and structures), turnover and client numbers, the limit and excess, claims history and file controls such as engagement letters and review steps, and the run-off and retroactive date.
How we help
A licensed Smiths adviser has the first conversation with you, reads the PI clause in the contract you are signing, and talks through limits, run-off and exclusions. Some covers are referred to another licensed Financial Advice Provider. If that happens we tell you who it is, and how they are paid, before your details go to that firm. That firm may charge fees. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy. Cover and price depend on insurer underwriting and the policy wording. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931).
To start, use the form at the top of this page.
Frequently Asked Questions
Do bookkeepers need professional indemnity insurance in NZ?
No general law requires it. A client, an accounting firm you subcontract to or a software partner may ask for it, so check your contracts and any body you belong to.
Is professional indemnity insurance compulsory for accountants in NZ?
For chartered accountants in public practice, CA ANZ requires evidence of complying PI cover when issuing a Certificate of Public Practice. For other accountants it depends on the body you belong to and your contracts.
What happens to my PI cover if I retire or sell my practice?
Claims-made cover stops responding to new claims once the policy ends. Ask about run-off cover before you close or sell, and how long it runs.
Does PI cover an honest mistake on a tax return?
PI is designed for negligent errors and omissions, so an honest mistake is the kind of event it responds to. Deliberate acts are excluded. Check the wording for tax penalties, which may not be covered.
Is PI the same as cyber insurance?
No. PI responds to a client's claim about your work. Cyber insurance typically responds to your own incident, such as a breach or ransom demand.
References
- CA ANZ, Certificate of Public Practice
- Limitation Act 2010, s 11 (legislation.govt.nz)
- Health and Safety at Work Act 2015, s 29 (legislation.govt.nz)
- Office of the Privacy Commissioner, notify a privacy breach
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Protect the people behind the business
Liability cover protects the business from claims. If you or a business partner could not work, or died, key person and shareholder cover can help keep the business, and your family, going.
- Key person cover, if the business relies on you
- Shareholder cover, so partners can buy each other out
- Income protection for owners and the self-employed
Read the PI clause before you sign
Paste the PI clause from your engagement letter or contract, and say if you do tax, bookkeeping or both. A licensed Smiths adviser phones you. If we refer you to another licensed firm, we tell you who first. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy.
A licensed Smiths adviser phones you. If we refer you to another licensed firm we tell you who first and how they are paid.
Read the full insurance guides
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