Accountants perform a crucial service for individuals, families, and small businesses. Whether providing tax advice or helping a company perform an audit, an accountant’s advice can mean the difference between a person or business having smoothly running finances or descending into fiscal turmoil.
Unfortunately, ours being a litigious society, an accountant can be sued for negligence or for making a mistake that results in financial harm to a client. Even if an act that results in a legal action is beyond the control of an accountant, say that of a dishonest employee, defending against such a suit, not to mention paying a settlement, can be expensive.
What does a liability insurance policy for an accounting firm cover? Basically, such a policy protects an accounting firm from the costs of defending against a legal action, even one that is frivolous. It will also cover, up to a limit of liability, the cost of a settlement. Some policies will even cover a firm from incidents that involve computer breaches. A hacker who accesses a client’s private data can cause untold damage both to a client and the firm doing its books.
Why Carry Liability Insurance?
Besides the obvious reason of protecting the accounting firm from the costs of a legal action, some large clients require that an accounting firm they retain have a liability insurance policy just to do business. It only makes sense, therefore to carry such a policy in order to expand the number of potential clients.
Some liability insurance policies will contain a risk management service, designed to decrease the exposure of an accounting firm to the sorts of errors and omissions that can trigger a lawsuit. Remember, clients will not hesitate to take their accountants to court if they feel that services received are not up to their standards. Without a liability policy, costs can be substantial.
If you would to like to discuss your options for business insurance please call us at 561-732-9305 our quoting hours are Monday through Friday from 8:30 AM to 5:30 PM. In addition, you can request a quote online. Please remember, We Handle All the Work, While You Save!