Yes, most bookkeepers should have insurance. While it is not always a legal requirement in Australia, it is strongly recommended and often expected by clients.

Bookkeepers handle sensitive financial information every day. This can include payroll, BAS reporting, invoices, and access to accounting systems. Even a small mistake or a cyber issue can result in financial loss for a client. If that happens, the bookkeeper may be held responsible.

Insurance helps protect your business, your income, and your professional reputation. It also reassures clients that you take your responsibilities seriously, whether you are a sole trader, work from home, or run a growing bookkeeping business.

Quick summary

  • Most bookkeepers should have insurance, even if it is not always legally required

  • Registered BAS agents must hold professional indemnity insurance

  • Clients often expect proof of cover before engaging a bookkeeper

  • Professional indemnity insurance is the most important cover

  • Public liability may be needed if you visit client premises

  • Cyber insurance is increasingly relevant for cloud-based bookkeeping

  • Insurance can be tailored for sole traders and home-based businesses

Do bookkeepers need insurance?

In most cases, yes.

While bookkeepers are not always legally required to hold insurance, many clients will not engage a bookkeeper unless the right cover is in place. This is because bookkeepers play a key role in managing financial records and compliance-related tasks.

If you are a registered BAS agent, professional indemnity insurance is an ongoing requirement set by the Tax Practitioners Board.

If a BAS is lodged incorrectly, payroll is processed incorrectly, or reporting errors occur, the client may face penalties or financial loss. Even if the mistake was unintentional, the client may seek compensation from the bookkeeper who prepared the work.

Insurance helps cover legal defence costs and potential compensation claims. It provides a financial safety net so that one error does not put your entire business at risk.

This applies regardless of whether you work from an office, from home, or remotely. The risk comes from the work you do, not where you do it.

What insurance do bookkeepers need?

The insurance a bookkeeper needs depends on how they work and the services they provide. However, there are several types of cover that are commonly recommended for most bookkeeping businesses. Many of these sit within broader insurance for professional services, where financial accuracy and data handling are key risk areas.

Professional indemnity insurance

Professional indemnity insurance is the most important cover for bookkeepers.

It protects you if a client claims they have suffered financial loss due to an error, omission, or mistake in your professional services. This can include issues with BAS reporting, payroll, financial records, or advice provided as part of your work.

Claims can arise months or even years after the work was completed. Professional indemnity insurance helps cover legal costs and compensation if a claim is made.

For most bookkeepers, this is the first policy that should be put in place.

Public liability insurance

Public liability insurance covers injury to people or damage to property caused by your business activities.

This is particularly relevant if you visit client offices, work onsite, or meet clients in person. For example, if someone is injured or property is damaged while you are providing your services, this cover can respond.

If you work entirely online and never meet clients face to face, this cover may be less critical, but it is still worth considering.

Cyber insurance

Bookkeepers increasingly rely on cloud software, online access, and digital storage of client data. This increases exposure to cyber risks.

Cyber insurance can help cover costs associated with data breaches, hacking, ransomware, and the loss of sensitive client information. Understanding common cyber risks for small businesses is especially important for bookkeepers handling client records across multiple platforms.

As cyber incidents become more common, this type of cover is becoming more relevant for bookkeepers of all sizes.

Management liability insurance

Management liability insurance may be appropriate for bookkeepers who operate through a company structure or employ staff.

This cover can protect against claims related to the management of the business itself, such as employment-related disputes or alleged breaches of duty. It is not essential for every bookkeeper, but it becomes more relevant as a bookkeeping business grows.

For broader context, some bookkeepers also review their cover alongside general small business insurance cover to make sure no key risks are missed.

What if you work from home as a bookkeeper?

Working from home does not remove the need for insurance.

There are specific working from home insurance considerations that many home-based bookkeepers overlook. Even when all work is done remotely, professional services are still being provided.

Home-based bookkeepers still handle sensitive financial information. If an error is made, a claim can still be made, regardless of where the work was done.

It is also important to note that standard home and contents insurance usually does not cover business activities. This means your equipment, data, and professional liability may be excluded if something goes wrong.

Cyber risk can also be higher in home environments, where networks may not have the same level of protection as commercial offices. Insurance can be tailored to reflect these risks and the way you work from home.

What happens if a bookkeeper is uninsured?

If a bookkeeper is uninsured, even a small issue can have serious consequences.

Without insurance, you are responsible for legal defence costs and any compensation that may be payable if a claim succeeds. These costs can quickly become significant, even if the claim is ultimately unsuccessful.

Being uninsured can also affect your ability to win and retain clients. Many businesses expect bookkeepers to hold professional indemnity insurance as a minimum. If you cannot provide proof of cover, you may lose work opportunities or be excluded from contracts.

Insurance is there to protect your business and your future, allowing you to continue operating with confidence.

How Grace Insurance helps bookkeepers and what to do next

At Grace Insurance, we understand the risks bookkeepers face because we work closely with professional service businesses every day. Whether you are a sole trader, work from home, or run a growing bookkeeping practice, we take the time to understand how you operate before recommending cover.

We help bookkeepers arrange insurance that is clear, practical, and suited to their actual exposure. This includes professional indemnity, public liability, management liability, and cyber cover, without unnecessary extras or confusing policy wording. Our advice is straightforward, and we support you not only when you take out cover, but also if you ever need to make a claim.

We’re here to help you with all your insurance needs.

Speak to a broker today to discuss bookkeeper insurance that is tailored to how you work and the risks you face. Protect your bookkeeping business and your future with insurance made simple and tailored to your needs.