THURSDAY, SEPTEMBER 29, 2022
As an accountant, you provide vital services that your clients rely on. Even though accountants are known for their ability to accurately evaluate and maintain financial records, mistakes can still occur. If such a mistake happens and ends up harming a client, the client may file a lawsuit against your firm for their resulting losses.
A single lawsuit like this can create a large financial strain on even the most stable firms. A such, it’s important for accountants like you to have professional liability insurance in place. Keep reading to learn more about this form of coverage and why you need it.
Why You Need Professional Liability Insurance
Put simply, professional liability insurance—also known as errors and omissions (E&O) coverage—can help protect your accounting firm if the work or advice you provide results in client losses and subsequent professional negligence lawsuits. This type of policy may apply to professional mistakes ranging from breach of duty, incomplete work, missed deadlines, budget overruns, misrepresentation and even wrongful acts. In the event of a professional negligence lawsuit, this coverage can help reimburse the associated legal defense expenses and settlement costs.
Professional liability insurance is a critical form of coverage for any business that provides expert advice or services to their clients. Therefore, it’s clear that accounting firms need this form of coverage.
What to Look for When Obtaining Professional Liability Insurance
When selecting a professional liability insurance plan for your accounting firm, there are several key things to look for in a policy. There are two big concerns such coverage needs to protect against. This includes the legal costs of defending yourself, as well as the costs associated with settlements or awards given to people who sue you. Keep the following tips in mind when obtaining professional liability coverage for your firm:
- Choose a coverage limit that fits your specific area of risk. Generally, it should be a limit that you and your insurance agency determine is a good fit based on the size of your business, threats and current trends.
- Determine if the policy allows for the legal defense costs to be separate from the limit. Otherwise, the attorney fees you pay could limit how much you have available for claims.
- You may also want to invest in an option to defend or duty to defend, in which case your insurance carrier can handle the legal matter for you.
Overall, professional liability insurance is an excellent investment for any accountant. Protect your firm today. Call Dealey, Renton & Associates at (800) 545-3090 for more information on San Francisco professional liability insurance.
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