Accountants face numerous risks in their industry, even though you would give your best in your work; mistakes are inevitable, and accountant professional indemnity insurance covers both people in employment and those with private practices covering areas such as book keeping, tax consultancy, payroll professionals among others. It’s not uncommon to find accounting professional being in a position to defend themselves against negligence they committed in the course of work. Insurance companies today will provide the cover in two faces; one for chartered accountants and the other for non-chartered accountants.
This insurance will cover areas such as:
Gross negligence emanating from mistakes in the course of duty or failure to exercise due diligence.
Misrepresentation as a result of providing wrong information.
Defamation which covers making statements about a person which is not substantiated.
Breach of confidence which happens when a client’s confidential information is shared without them allowing it.
An accountant has the duty of providing professional advice to his clients, hence, the cost of providing wrong information, making errors of commission and omission can be considerably high. The level of cover therefore is different from one practice to another; either way, the highest amount per cover is often $1 million. It would be prudent to cover property belonging to a client but that gets lost or is damaged in the course of work and in the hands of a professional accountant.
Considering taking up a wider coverage
Public Liability Insurance is another area that an accountant should obviously consider alongside professional indemnity insurance; this is owing to the fact that accountant professional indemnity insurance may not cover the accountant holistically. Public Liability Insurance will provide cover against claims levied by the public and clients in general who rely on the professional advice provided to make decisions that turn out costly.
Other areas of insurance to consider are: employer’s liability insurance, premises insurance and general contents insurance. By and large, professional covers are so intensive that cannot easily be exhausted. It would be crucial for an accountant to consult her insurance services company/provider to explore options of tailor making insurance services. An accountant committing a simple mistake (whether an error of omission or commission) could lead to serious financial losses on business hence is bound to have a liability to the client due to the loss.
On the whole, professional indemnity cover is becoming a necessity in business. For accountants particularly, it’s of paramount importance. The cover protects the accountant; the business together with the clients, besides, the professional has peace of mind while he transacts business. The business environment is becoming more complicated even for the accounting professional and due to competition; most insurance companies are offering competitive premiums which is an advantage. It’s noteworthy that insurance companies cover accountants officering scores of services including public accounting services, mergers and acquisitions, management consultancy, auditing, business valuations just to mention a few. Against this background therefore, it’s prudent to consider an accountant professional indemnity insurance cover for your practice.