Accountants are trained to make sure their clients get the most accurate service efficiently without compromising quality. The problem lies with human errors which can sometimes be unforeseen. Regardless if the mistake was an accident or not, the error can still lead to a lawsuit which put the accountant in a financial bind. Accountants should ensure that they have accountant liability insurance to cover their profession as well as their respective firms. There are many benefits that come with the insurance including:
- There are many grounds by which a client can sue an accountant such as errors committed when preparing their financial statements, errors committed while auditing, poor management advisory, failing to file or prepare their tax statements and not able to uncover embezzlement. In case of these errors and omissions, the accountant liability insurance will provide coverage for the professional to give them peace of mind as well as protection financially.
- An accountant is more likely to get clients if they have the right coverage insurance. The absence of professional liability insurance will lead to missing out major opportunities and it can have a negative effect on the bottom line of the professional.
- A simple mistake can lead to costly lawsuits not matter how careful a professional is in committing errors and omissions. Accountants covered with professional liability insurance can get financial aid for the legal fees, settlements or judgments from the court and court and administrative costs. Clients are willing to take legal actions if their business is hit with losses thus it is essential for clients to have financial protection.
- The price of a policy is not the same because there are factors to consider such as the risks that come with the firm as well as the insurer. The bottom line is that majority of the insurance policies are very affordable with many of them costing only 1 per cent of the yearly revenue of an accounting firm.
- There are benefits entailed by an accountant liability insurance including risk management services which can help accounting firms reduce the risks of being exposed to claims and lawsuits. Other insurers provide professionals with consultation on various topics including firm management, ethics, client relationships ad malpractice avoidance.