Audit & Investigation Insurance

It is no longer a matter of if, but when!

Business today is confronted by a wide range of potential audits or investigations related to statutory returns - business tax; fringe benefits tax; capital gains tax; goods & services (BAS); payroll tax; stamp duty; wholesales tax; withholding tax; workers compensation; superannuation surcharge levy; superfunds; company returns - ASIC; office of charities, gaming and racing; sales tax; trust accounts; fuel rebate; prescribed payments; reportable payments; research & development; export grants, to name a few.

Audit & Investigation activity is on the rise. Businesses previously remote or untouched are now experiencing increased audit or investigation activities, in both metropolitan and country areas.

Insured Concerns

• Reluctance to engage professional assistance due to cost.
• Typically 'unexpected cost', thus unbudgeted.
• Concern at the ability to pay for proper professional fees at a time when the business may be experiencing financial difficulties or reduced trading activities.
• Direct payment of fees incurred to the professional concerned so as not to impact the business's cash flow.

Policy Coverage

The policy covers professional or qualified experts fees to assist an Insured respond to any Audit or Investigation arising from any statutory returns legally required to be lodged, whether by your accountant or by yourself or your organisation, in any one accounting period.

The range of different returns business entities are required to lodge is extensive. So long as legally required by a statutory authority, all returns are insured.

Returns are covered indefinitely - 'claims incurred' policy format.

The policy provides life time or "indefinite" cover for all returns lodged in any one accounting period. This includes prior years' returns so long as prescribed lodgement dates or agreed extensions of time have been properly complied with.

Period of Cover

The policy covers all returns lodged in a financial/tax year. So typically, the policy covers 1st July to 30th June, although some companies may be 1st January to 31st December or 1st April to 31st March etc.

Insureds can also cover previous financial/tax years.

Claims paid direct to the relevant professional within 20 working days

Insureds are not required to pay any professional fees first and then wait for settlement from the Insurer. To create an audit trail, any professional fees incurred need to be sighted and signed by the Insured to attest that the relevant tasks were undertaken by the professional concerned and returned directly to our office so that we can assure direct settlement within 20 working days.

NOTE. Due to the introduction of GST, if the insured does not have an ABN, the professional fee amount including the GST component is paid by the insurer. If the insured does have an ABN, the professional fee amount is paid by the insurer and the GST component needs to be invoiced and paid to the professional firm by the insured.

Individuals and Entities

Under the Master Policy option, there are three (3) new packages:

• Individual Pack - covers the first $5,000 of professional fees per annum for the nominated Individual plus spouse/partner and includes cover for any passive trust or personal superfund.
• Self Employed Pack - covers the first (A) $10,000 or (B) $15,000 of professional fees per annum for the self employed person (means no employees); their spouse/partner; their trading entity; and any passive trust or superfund.
• Business Entity Pack - covers the first (A) $15,000 or (B) $25,000 of professional fees per annum for all operating entities in the same ownership structure and any trusts or superfunds.

Note 1. Insured entities with a combined turnover over $50 million and up to $100 million can apply for a separate quotation.
Note 2. Insured entities seeking $50,000 sum insured can apply for a separate quotation.

Policy Exclusions

The main areas relate to 'returns where unsupported, deliberately non disclosed information or misrepresented deductions have been included or returns lodged outside of the prescribed dates or authorised extensions of time'.

Please contact us for an obligation free quotation.