How to Start a Bookkeeping Business – Do You Need Professional Indemnity Insurance?

If you are in the process of starting a bookkeeping business there are many aspects which you will need to consider. One of the most important insurances you will need to consider for your business is professional indemnity insurance. With out it you might be risking the long term future of your business.

As a service based business, you will be promoting your own professional services and know how to clients. If there is a time where your clients accuse you of substandard work which causes them a loss of some description, professional indemnity insurance is there to help you with this problem.

Historically, professional indemnity insurance for bookkeepers was quite expensive as this type of career choice was seen to be a risky profession. Additionally there was not a lot of choice in the market place for insurers who would even offer professional indemnity insurance and this also meant higher premiums. Consequently, many public practice bookkeepers did not either consider it, or after investigation, they ascertained it was too expensive for their small business.

Fortunately as times have changed and bookkeeping has become a recognized mainstream career choice, it is getting easier to obtain not only a cheaper premium, but there are also more insurers to choose from. In Australia in particular, with the introduction of goods and services tax (GST) in 2000, bookkeeping became widely recognized as many small business people looked for an in house bookkeeper for the first time. With this influx of requests for bookkeepers and more people seeing an opportunity with the relevant skills to start their own small bookkeeping business, professional indemnity insurance has seen a rise of interest and a reduction of premium cost.

If you are starting your own bookkeeping business, professional indemnity insurance can save your business from ruin if there is ever an issue or a time where you may need to make a claim. Since it is such a vital part of any bookkeeping business, it is important to look at different options to source a quote.

If you are a member of a professional association, and I mist admit I highly recommend this for many reasons, your professional body will most likely be able to offer a premium for its members. Many professional associations can provide low premiums due to bulk purchasing power and discounts offered by insurers for obtaining the associations business. If you are not a member of a professional association, you can always research which organizations they use and obtain an independent quote.

Be sure to obtain a number of quotes and look at each policy and assess them against your own needs. Policy prices these days are quite affordable and like any insurance will pay for itself many times over should you ever need to use it.