As a busy bookkeeper, you have your finger on the pulse when it comes to the financial state of play of your clients’ businesses. You are intimately involved in your client’s financial management – and that is a role that does not come without risk.
Whether you are an accomplished bookkeeper or just starting out in your bookkeeping career, you will likely be aware of the potential bookkeeping risks that can rear their ugly heads and have the potential to create problems for you and your bookkeeping business.
Even the most experienced bookkeepers are still human – and mistakes and accidents can and occasionally do happen. And when they do, they can have disastrous results if you have not taken critical steps to reduce the risks to your bookkeeping business.
While recording the financial transactions of your clients is a significant responsibility, it is not just financial transactions that could expose your bookkeeping business to risk. This is where bookkeeper Professional Indemnity insurance* (a common term used when referring to a selection of business insurance products tailored to bookkeepers) can help reduce the risks to your bookkeeping business.
There are several types of business insurance that bookkeepers may consider as part of their risk management strategy, including Public Liability insurance, Statutory Liability insurance, and Cyber Liability insurance. But arguably the most critical type of business insurance for bookkeepers is Professional Indemnity insurance.
The case for Professional Indemnity Insurance for bookkeepers
As noted by the Institute of Certified NZ Bookeepers (ICNZB), bookkeepers can benefit from reducing their risk via Professional Indemnity insurance. The ICNZB even notes that claims relating to the professional advice or services that bookkeepers give their clients is arguably the greatest risk for bookkeepers.
Indeed, the not-for-profit organisation cautions that the ramifications of a Professional Indemnity claim against a bookkeeping business may linger long after a bookkeeper has sold or wound up their practice. The ICNZB notes that the flow-on effect can even follow bookkeepers into their retirement years.
As such, a Professional Indemnity claim against your bookkeeping business should not be taken lightly. It has the potential to permanently taint your otherwise peerless reputation as a bookkeeper and may limit your ability to attract new clients. And in extreme cases, it may even permanently harm your bookkeeping business and your personal standing.
As a bookkeeper you are closely involved with the financial management of your clients’ business – and that is a role that does not come without responsibilities and risk. Even the most seasoned bookkeepers operating in New Zealand are human, and mistakes and accidents on the job can and occasionally do happen. And when they do rear their heads they can potentially have disastrous consequences if you have not taken steps to reduce your business risk.
While documenting the financial transactions of your clients is a significant responsibility, it is not just financial transactions that could expose your bookkeeping business to risk.
How does Professional Indemnity Insurance reduce risks for bookkeepers?
As a bookkeeper you can benefit from reducing the risks to yourself and your business via bookkeeper Professional Indemnity insurance. Try as you might, but errors can and do happen – even for the most dedicated and diligent of bookkeepers.
Bookkeeper Professional Indemnity insurance can reduce risks for bookkeepers related to:
- Damages and claimant costs awarded against your bookkeeping business.
- Legal and defence costs.
- Claims investigation costs.
- Inquiry attendance costs.
- Public relations costs.
Some things that aren’t covered under Bookkeeper Professional Indemnity insurance include:
If a client alleges financial loss as a result of an action you have taken (or not taken) while acting as their bookkeeper, your client may take legal action against you to recover those losses. For example, your client may allege that you have:
- failed to provide the promised services;
- been negligent in rendering your professional services;
- provided reckless, incomplete, or incorrect work; or
- made mistakes, oversights, or omissions.
It’s worth noting that the risk of a claim being bought against your bookkeeping business is not necessarily related to your skill, experience, or professionalism as a bookkeeper. Rather, sometimes it may simply come down to the client being unhappy with the results of your bookkeeping services.
What does Bookkeeper Professional Indemnity Insurance cover me for?
Subject to the policy terms and conditions of your specific policy, Professional Indemnity insurance for bookkeepers can cover:
- Damages and claimant costs awarded against the insured.
- Legal and defence costs.
- Claims investigation costs.
- Inquiry attendance costs.
Bookkeeper Professional Indemnity insurance the BizCover way
Business insurance can get confusing at times. But at BizCover, we’ve made it our mission to ensure that business insurance is easy and fast, for small business owners. Beyond Bookkeeper Professional Indemnity insurance, other types of business insurance that bookkeepers in New Zealand may consider to reduce their risk include Public Liability insurance and Business Insurance.
BizCover helps bookkeeping small business owners all over New Zealand to reduce the risks to their bookkeeping business via Professional Indemnity insurance simplified. Visit our insurance for bookkeepers portal online to compare competitive quotes from leading insurers online, enjoy a drama-free business insurance experience, and get on with your day. If you would like to chat with our friendly team you can reach us on 0800 249 268.
*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Limited.
