Chartered accountants are responsible for taking care of financial statements, tax returns and investment solutions of their clients. They have access to a lot of confidential details of their clients and maintaining the privacy and confidentiality is a tough task especially if the accountancy firm is large and has a number of employees. The accountants make some errors out of negligence that may result in financial loss to the clients.
The clients can file a lawsuit on the accountant if they are unhappy with your work or your negligence has caused them financial losses. In such worst-case scenarios, the accountant professional liability insurance as a safeguard from the claims of negligence or poor quality work.
The policy is specially designed to cover the accountancy professionals against the omission and commission mistakes. The cover offered by the accountant professional liability insurance helps them to take care of the claims made against them. The policy is most suitable for accountants, who take care of bookkeeping and management of a company’s accounts, preparing statutory yearly reports like profit and loss statements and balance sheets, file the tax returns and undertake other statutory responsibilities of the client company.
The provider of the accountant professional liability insurance policy agrees to pay the pre-determined liability compensation to the claimant. The policy also covers the legal expenses for fighting the lawsuit in the court. However, the accountant must have a working policy and inform the insurer about the claim as soon as it is filed.
The accountant must choose adequate cover depending on the nature and size of his firm. He should also consider the risks like cyber risk, governance risks and others he might face in the due course of business before deciding on the type of policy and the required cover. The accountant has to maintain a realistic view about the nature of the damages that can occur and the claims required. He should also consider the legal costs while determining the cover of the chartered accountant professional liability insurance policy he plans to go for. Choose a good and trusted insurance provider and opting for sufficient cover are two most important things to keep in mind while selecting the policy.