Protection Available through A Policy Designed for CPAs

Accountants face potential liability on a daily basis. It’s the nature of the work they perform, which is why coverage to protect them is so vital. Yes, if you make an error you should be found accountable, but what if the claims is unfounded, or simply false? This is why you need professional liability insurance for accountants. After all, individuals, financial institutions and investors depend on you to handle loan applications and to process accurate information, especially during audits and when investment decisions are being made.   It’s no fun being targeted to take the blame of the failure of a business. You can be cited with making errors and omissions in the work you perform, and you’re likely to wind up defending your position in a courtroom. Providing financial advice to companies, preparing their tax returns or auditing their financial statements can come at great cost to you. One of your jobs is to accurately reflect the financial situation of those businesses and individuals based on information that was furnished to you.  

Liability coverage is well worth the cost

  The American Institute of Certified Public Accountants, the national trade organization for CPAs, recommends that every accounting firm carry some form of liability insurance. This policy is actually less expensive for CPAs than it would be for a physician or attorney, and provides defense costs if you ever wind up as a litigant.   The cost of a policy is in part determined by the size of the firm, the type of work performed, and you can also factor in the amount chosen for the deductible. Larger firms, due to their rather large volume of clients tend to be at greater risk. For example, firms doing an abundance of compilations, involving creating financial statements from information provided to them by clients, may mistakenly add figures incorrectly.   Regardless of the type of error, when mistakes occur the client may feel that their only recourse is to sue the accountant, citing negligence, or errors in the commission of services, which is the only reason you need to carry professional liability insurance for accountants. Speak to your agent about specific questions you may have.