Insurance market update for accountants: Keeping costs fair while staying covered

If you run a solo accounting practice, insurance may not be the first thing you want to think about. But in Australia, if you’re providing accounting services to the public, having professional indemnity (PI) insurance isn’t just a good idea, it’s a legal requirement. For sole practitioners, the challenge often lies in balancing the cost of insurance with the need for adequate protection.

The good news?

Insurance market conditions in 2025 have been more favourable for accountants, despite many businesses facing economic challenges in their immediate outlook.

According to Marsh’s report Australian Mid-Year Insurance Market Update 2025, the market was more favourable for professional indemnity insurance in the first half of the year.

At Marsh, we use insurance market knowledge and facility premium pools, working with insurers as needed to achieve results that meet our accountancy clients’ requirements.

Marsh continues to negotiate with insurers on a regular basis to ensure the facility remains in line with market conditions.

Market shifts accountants should know

• Improved market conditions: The professional indemnity insurance market has become more favourable in the first half of 2025 with noticeable improvements in market conditions, which has led to better insurance renewal results for businesses.
• Higher limits: We are seeing increasing requests for higher PI policy limits from accounting businesses undertaking work for government and larger corporate clients. Not only for the period of the contract but often requiring the limits maintained for a certain number of years after the work has completed.
• Restructuring insurance programs: There’s been a trend for mid-sized practices restructuring insurance programs to maximise available market capacity. This is especially relevant for sole practitioners who may be considering bundling PI + public liability + cyber cover under one streamlined package policy.
• Use of AI tools: Insurers are increasingly scrutinising the use of AI tools in professional services, which could also affect accounting practices using automated tax or audit software. Accountants in this space need to be prepared to provide additional information to their insurers on the type of AI tools used and be able to demonstrate there are appropriate AI risk management controls and output verification process to address any biased, false or misinformation generated by AI tools that the business may use to provide its professional services to clients.
• Risk management focus: Insurers are assessing how well insured businesses manage their risks. They look for updated processes and manuals that address recent regulatory changes. Examples of recent important changes: amendments to the Privacy Act 1988, Corporations Act 2001, Fair Work Act 2009, Work Health and Safety Act 2011.

Claims in the accounting industry

Accountants often provide high-stakes advice, whether it’s tax compliance, bookkeeping or audit services. Even small mistakes like missing a lodgment deadline, misinterpreting regulations or giving incorrect advice can expose you to negligence claims. 

Here are the top claims trends from 2025 that accounts should be aware of:

Professional indemnity claims trends in accounting industry

• Tax advice is a frequent reason for claims against accountants due to the consistently changing Australian regulations.
• To help prevent professional negligence claims, businesses should establish a process for peer reviewing clients’ files to ensure all updated regulations are properly applied.
• Marsh’s claims data show that even when accountants aren’t directly at fault, they can still face claims and legal costs. In one example, an accountant was sued after a client’s employee committed fraud. The claim was settled in the accountant’s favour thanks to strong recordkeeping and clear engagement terms.
• Claims trends data indicates that the ATO is focusing on income tax (rental property) and specialised income tax areas such as trust distributions, employer obligation audits and payroll tax, with a particular interest in cross-border workers, super guarantee, fringe benefits and PAYG withholding tax.

Cyber security claims

The frequency of cyber claims continues to rise in the accounting industry. This has been driven mostly by sophisticated ransomware attacks which are becoming increasingly prevalent, with attackers seeking to access your clients’ data and personal information, which will likely have value on the dark web.

Insurance renewal tips for sole practitioners

Here are some practical steps to optimise your insurance renewal:

• Start early. Engage with your broker well before renewal deadlines. Over the past 12 months, review any changes in your business and share relevant details with your insurer. If you’ve had claims or incidents, show what steps you've taken to prevent similar issues in the future. Being open and honest are key to establishing a trusting relationship with your insurer, and it may help you achieve better renewal terms.
• Keep records in order. Good documentation helps both in claims management and the insurer’s underwriting process.
• Highlight risk improvements. Demonstrate to insurers how you effectively manage risks like cyber security and regulatory/compliance. Share risk management plans and staff training records.
• Review cover options. Don’t focus only on your PI renewal. Consider your other risk exposures and insurance policies such as public liability, cyber, management liability, property, and business interruption. Your broker can help you identify these risks and suggest appropriate coverage options for consideration.
• Ask about limits. Don’t just default to the minimum or expiring policy limit, review and assess what’s adequate for your current business activities and services.

Now is the right time to review your cover.

Accountants insurance arranged by Marsh can help you meet compliance requirements, protect your reputation and keep your business running smoothly. PI insurance arranged by Marsh aims to provide broad coverage and is negotiated on your behalf to deliver the benefits of premiums in line with industry trends. 

Have questions?

See our FAQs below, find out more about insurance solutions for accountants arranged by Marsh or contact our team.

References

1. Marsh Australia (au.marsh.com)
2. Understanding indemnity risks for accountants | Marsh Australia 
3. Accountancy insurance | Marsh Australia 
4. Marsh Australian Mid-year Insurance Market Update 2025 

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change.

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