While accounting professionals are committed to providing their clients with accurate and high-quality service, mistakes can happen. Accidental or not, just one accounting error can result in a costly lawsuit.
In order to protect themselves and their firms from a number of exposures, accountants should seek professional liability insurance, which can provide the following:
- Protection from costly errors. Clients can sue their accountants for a variety of issues, including but not limited to, errors in financial statements, errors in auditing activities, negligent tax filings or tax preparation, failure to detect embezzlement and poor management advisory services. Professional liability insurance can protect accountants from these errors and omissions, providing much-needed peace of mind and financial protection.
- Opportunities to engage more prospects. More and more clients expect their accountants to carry the proper insurance. Without professional liability coverage, you may miss out on key opportunities, which can directly impact your bottom line.
- Coverage for legal expenses. While you may take every necessary precaution to avoid errors and omissions, costly lawsuits can arise from just one mistake. Professional liability insurance can reimburse policyholders for legal fees, court costs, administrative expenses, and any settlements or court judgments. Because your clients won't hesitate to take legal action if you fail to meet their expectations, financial protection is more important than ever.
- Affordable coverage. While the pricing of a policy can differ depending on the insurer and a firm's unique risks, professional liability insurance is often very affordable. Many policies cost just 1 per cent of an accounting firm's annual revenue.
- Risk management resources. As a benefit of coverage, some policies provide a number of risk management services. These services can help accounting firms proactively reduce their exposures. In addition, some insurers provide access to professional consultation topics like ethics, malpractice avoidance, client relationships and firm management.
Want to learn more about professional liability insurance?
Professional liability insurance covers claims that arise from the rendering of or failure to render professional services. These claims can occur without warning and bankrupt a firm, making the right policy all the more important. Contact a broker at the Axis Insurance Group today to learn how professional liability insurance can be used as part of your total risk management program.
