Organisations will soon need to report breach notifications to the privacy commissioner or otherwise face fines of up to $1.7m for companies and $340,000 for individuals. The privacy commissioner will determine if proper systems are in place to protect data and if not then a fine may be payable. For those accountants covered by a specific cyber insurance policy, this fine would be covered. Regardless of the media and political hype, a contingent of accountants believe they will be innately unscathed by the cyber evolution. Only those who have acknowledged the inevitable and taken the necessary precautions, such as a cyber insurance policy, will be properly equipped.
“More often than not I hear accountants telling me that a cyber breach will not happen to them and in the event it did affect them, their professional indemnity insurance or business interruption insurance will cover it. In reality, accountants and their clients could have a rude awakening when they realise that they are not sufficiently covered.” said Karen McDonald, Accountancy Insurance’s Associate Director of Professional Risks.
It is estimated that the total global premium pool for cyber insurance was $2.5 billion in 2015 and is anticipated to increase to $20 billion by 2025. The staggering anticipated increase is evidence that cyber crime is a very real issue, and will only become more prevalent.
Perceptions are also skewed in relation to tax audit insurance. The insurance, which is implemented by accounting firms, covers the professional fees in the event of an audit, enquiry, investigation or review by the Australian Taxation Office, or any other government agencies.
“Despite our tax audit insurance offering, Audit Shield, protecting more than 2,500 accounting firms and nearly 200,000 individuals, businesses and SMSFs, we still hear accountants saying to us that they are good at what they do so they shouldn’t need the insurance. That is not what Audit Shield is for.” said Ferdy Ouw, Director of Accountancy Insurance.
With the Australian government’s focus on the Panama Papers and addressing the deficit in the budget, it means one thing – a stronger focus on compliance and increasing audit activity. Regardless of whether an accountant has lodged a compliant and thorough return for their client, lodgements can still be subject to audit activity which either the client or the accounting firm will need to cover the bill for. Audit Shield is a tool to mitigate the risk of unplanned professional fees.
Political discretion is out of an accountant’s control. However, the way in which an accountant perceives certain measures, such as relevant insurances that will protect their firm and their clients, is controllable.
Find out the facts about cyber insurance and tax audit insurance. Contact the experts at Accountancy Insurance on 1300 650 758 or email@example.com