Are You Actually Covered? The Most Common Insurance Gaps We See in Accounting Practices
At the start of each year, many accounting practices assume their insurance is “sorted.” The policy renewed. The certificate arrived. Job done.
But in reality, a significant number of claims issues we see don’t stem from having no insurance at all — they come from gaps in cover that went unnoticed over time.
These gaps are rarely intentional. They usually occur because practices evolve faster than their policies do.
Below are the most common insurance gaps we see in small to mid-sized accounting practices — and why they matter
1. Changes to services that were never disclosed
Many practices quietly expand their service offering over time. This might include advisory work, SMSF administration, outsourced CFO services, or specialist consulting.
If these services weren’t disclosed when your policy was taken out or renewed, they may not be covered under your professional indemnity insurance.
The issue only surfaces when a claim arises — and by then, it’s too late to fix.
Key takeaway: Any change in the type of advice or services you provide should trigger a review of your cover.
2. Staff and contractor changes
Adding staff, engaging contractors, or changing how work is delegated can alter your risk profile.
We often see policies that haven’t been updated to reflect:
New employees
Contractors working under the practice’s name
Offshore or outsourced support
This can create confusion about who is considered an “insured person” under the policy, which matters enormously at claim time.
3. Assuming cyber risk is covered by PI insurance
This is one of the most common misconceptions.
Professional indemnity insurance may respond to certain types of data-related claims, but it does not replace cyber insurance. Data breaches, ransomware attacks, and system interruptions are increasingly common in accounting firms and often sit outside standard PI cover.
Without dedicated cyber insurance, practices can be exposed to:
Business interruption costs
Notification and remediation expenses
Regulatory penalties
Recovery and IT forensic costs
4. Underestimating how much cover you actually need
Many policies are set up years ago based on historical revenue, staff size, or client mix — and never reviewed.
As practices grow, minimum cover levels required by professional bodies or regulators may increase. At the same time, claim sizes across the profession have risen.
Being underinsured may not affect your premium much, but it can significantly affect your protection.
5. “Auto-renewed” policies that were never reviewed
Auto-renewals are convenient — and often sensible — but they can create a false sense of security.
If your policy has renewed year after year without a proper review, it may no longer reflect:
How your practice operates today
The technology you rely on
The regulatory environment you work within
Auto-renewal should never replace a periodic risk check.
6. Why these gaps matter
Insurance gaps rarely announce themselves upfront. They only become visible under pressure — during a claim, an audit, or a regulatory issue.
At that point, the consequences can be stressful, expensive, and disruptive to your practice.
The good news is that most gaps are easy to identify and address early with the right questions.
7. A simple way to sense-check your cover
If you’re unsure whether any of these issues apply to your practice, a quick risk review can help highlight potential gaps before they become problems.
Abacus Australia offers a short, practical Risk Assessment designed specifically for accounting practices. It takes just a few minutes and provides clarity on whether your current cover still fits your business today.
Starting the year with clarity is far easier than dealing with surprises later.
