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Frequently Asked Questions

About This Offer

Your accountant introduces AuditCover’s Tax Audit Insurance to their clients as an optional protection against the cost of responding to tax audits and reviews.

It’s a proactive offer — not a reaction to a problem.

In other words, you are not receiving this because anything is wrong.

No. This offer is not connected to any audit or review.

It’s simply made available each year so clients can choose whether they’d like cover in place.

No — completely optional. Some clients like having protection. Others are comfortable self-funding the cost.

The choice is entirely yours.

No. Most people who receive this offer are never audited.

But audits and reviews can happen randomly, or through data-matching programs, even when everything has been done correctly.

The real question isn’t, “Am I in trouble?”

It’s:

Would I prefer to pay a premium now to cover eligible professional fees (defined in the policy), or risk paying professional fees later if reviewed?

The Audit & Review Environment

The ATO conducts millions of compliance activities each year. In recent years, there has been significant growth in:

  • Data matching
  • Payroll and super compliance programs
  • Industry benchmark reviews
  • Automated discrepancy alerts

Most reviews are routine. However, they still require your accountant’s time and resources to resolve, and may result in professional fees.

Even a routine ATO or State Revenue review may require your accountant to:

  • Gather documents
  • Review historical transactions
  • Prepare written responses
  • Liaise with the authority
  • Provide technical advice

That work takes time, which may cost you.

Professional fees vary depending on the scope and complexity of the review and the adviser’s rates. As a guide only, fees may be in the range of:

  • $2,000–$5,000 for simpler reviews
  • $5,000–$10,000+ for more complex matters
  • Higher if multiple years or entities are involved

Professional fees can be incurred even where no additional tax is ultimately payable.

What The Policy Covers

The policy may cover eligible professional fees incurred in responding to an audit or review that meets the policy definitions, subject to limits, conditions and exclusions.

It does not cover tax payable, penalties or interest.

Cover applies to professional fees incurred in responding to an audit or review that meets the policy definitions and is conducted by a relevant authority during the policy period, subject to limits, conditions and exclusions.

Examples of covered authorities and review types may include:

  • The Australian Taxation Office (ATO)
  • State Revenue Offices (including payroll tax, land tax and stamp duty)
  • BAS / GST reviews
  • Income Tax audits
  • Capital Gains Tax reviews
  • Fringe Benefits Tax reviews
  • Superannuation Guarantee reviews
  • Workers Compensation audits

The policy can respond to eligible audits or reviews that relate to earlier periods, provided the audit or review first arises during the policy period (as defined in the policy) and you were not aware of it before the policy started, subject to the policy terms, limits, conditions and exclusions.

Depending on eligibility and what is shown on the schedule, policies may cover:

  • Individuals
  • Companies
  • Trusts
  • Partnerships
  • SMSFs
  • Deceased estates
  • Not-for-profit organisations

Multiple related entities may be included where they meet the policy definition and are listed on the schedule.

There is no set minimum or maximum number of entities, but underwriting limits may apply.

No. There is no excess or deductible on claims.

The policy does not cover:

  • Tax payable
  • Penalties
  • Interest
  • Fines
  • Criminal matters
  • Reviews already underway before the policy started

See the policy wording for the full exclusions and conditions.

How The Policy Works

The policy is owned by the policyholder named on the schedule (which may be an entity in your group). It is not owned by your accountant. 

The policy remains in force even if you change accountants, subject to the policy terms.

HDI Global Specialty SE (ABN 58 129 395 544, AFSL 458776) is the insurer for this policy and is authorised to provide general insurance in Australia.

It covers 12 months from the commencement date shown on your schedule. It is not tied to a financial year.

Cover starts from the commencement date shown on your schedule once the policy has been issued and the premium has been paid (subject to the policy terms).

Yes. There is a 14-day cooling-off period from the commencement date shown on your schedule, provided no claim has been made, subject to the policy terms.

When you purchase a policy, you can authorise your accountant to assist with claim notification and communications. In practice:

  • Your accountant (or you) can lodge a claim and provide supporting information
  • The insurer assesses the claim in accordance with the policy
  • If the claim is accepted, payments are can be made directly to your accountant where permitted and agreed

You may still need to provide information or documents to support the claim.

Choosing Your Level of Cover

That depends on:

  • The size of your business
  • How complex your affairs are
  • Whether you have employees
  • How many entities you operate

Higher complexity usually means higher potential professional fees.

If you’re unsure, you can discuss typical review scope and likely professional fees with your accountant.

If eligible professional fees exceed your policy limit, you are responsible for the amount above the limit.

Choosing a higher limit can reduce the chance of out-of-pocket costs.

Yes. Changes can be made to your policy, subject to terms and conditions and any premium adjustment.

Tax, Payment & Regulatory Information

Tax deductibility depends on your circumstances. Many businesses treat premiums for this type of cover as a deductible expense. Individuals and businesses should confirm their position with their accountant or tax adviser.

Yes. This is a general insurance policy underwritten by HDI Global Specialty SE (AFSL 458776).

AuditCover Australia Pty Ltd (AFSL 535509) distributes the policy under an authority from HDI.

You can review the policy wording before purchase.

Yes — payments are processed securely online and policy documents are issued electronically.

If you are dissatisfied with the service you have received, a declined claim, the value of a claim, or financial hardship, please contact AuditCover in the first instance and we will endeavour to resolve the issue as quickly as possible.

You may also contact HDI Global Specialty SE:

We aim to acknowledge complaints within 1 business day and respond in writing within 30 calendar days (provided we have the necessary information). Full details are set out in the policy documents.

Making Your Decision

This simply comes down to your risk appetite.

Some clients prefer to insure against the cost of eligible professional fees if an audit or review occurs.

Others are comfortable self-funding those fees.

It’s not about expecting an audit. It’s about helping to reduce financial stress if one occurs.

 

About AuditCover

AuditCover Australia Pty Ltd is an insurtech underwriting agency. This insurance is issued by AuditCover on behalf of the insurer HDI Global Specialty SE. AuditCover is a regulated entity, our Australian Financial Services licence number is 535509.

AuditCover is backed by some of the best and most experienced names in the industry. These include Insurtech Gateway, Hunter Equity, and a long list of some of the best and brightest across insurance, accounting and technology.

We like to look at things differently and we question the status quo. We’re not bogged down in old ways of thinking and that helps when you are changing an industry.

We believe that by taking a digital-first approach, managing client data securely, and by building an insurance product that covers the taxpayer directly, we can make audit insurance a seamless process for everyone. That means no painful paperwork, no lengthy setup times and excellent data security. It means accounting firms can partner with a distribution platform that does the heavy lifting, so you don’t have to. It’s about simpler audit protection the whole way.

Partner FAQs

Tax agents refer their customers to AuditCover for personalised client policies. This means there is no risk of arranging the insurance or giving unauthorised advice. You can also lodge claims on behalf of your client.

AuditCover makes sure to protect your client data at every step of the way by ensuring we’re sticking to cloud-based sharing so that no data is ever vulnerable to being accessed by another party. This system protects not just your clients, but also your practice.

Our approach to onboarding new referral partners makes getting set up a breeze with our usual setup complete and ready in 1 hour.

It’s simple really! The taxpayer is the one that gets investigated. We stick to this approach to make things easy when accounting firms are referring clients. We steer clear of “master” or practice policies, as these usually mean more work and responsibility for the accounting firm and we prefer a more transparent partnership.

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This insurance is issued by Auditcover Australia Pty Ltd (ABN 63 638 872 634, AFSL 535509) on behalf of the insurer HDI Global Specialty SE (ABN 58 129 395 544, AFSL 458776).

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