Protecting Your Practice – Insurance For Accountants
Chartered Accountants and tax (financial) advisers play a key role in people’s lives by sorting out their key issues. Majority of the people don’t even know half of the taxation system applications. This is where accountants come into action and help us out. Accountants may offer their services privately or with a company setup. In this way, accountants and tax advisers cover up the financial aspect of their clients on day to day basis. Being an accountant, do you think that you need a cover too? If the answer is “no” then you need to rethink the process.
The article will help accountants understand why it is important to gain a cover during their practice whether providing services alone or on a behalf of firm. Not having an insurance cover can seriously harm the business or end your career. You might have been able to avoid any such instance till now but it only takes one unhappy client to ruin your entire life. Don’t be reckless, opt for an insurance cover which actually covers you. What are we recommending? Professional Indemnity Insurance cover is what we suggest to all accountants in Australasia. You will receive the same recommendation if you go to any insurance provider.
More Info on Professional Indemnity Insurance
The insurance type was designed for only professionals such as accountants and tax advisers. The basic purpose of this insurance is to cover professionals who offer some sort of service or advice to customers. It is exactly what accountants do. When does the insurance gets to play its role? In case of legal action and claim made by your customer for damages to any third party caused due to wrong act and omission during professional duty. Breach in providing services could also be a reason for claim by the customer. Third party is known as the customer who might bear any injury or financial loss due to services/advice provided by the accountant. The third party has right to take legal action in order to recover losses. In this situation, Professional Indemnity cover will help protecting your reputation and assets.
Do Accountants Really Need Professional Indemnity Insurance?
The kind of case we mentioned above can also be called “professional conduct claim”. Your will be required to spend time and money on this case. Here is the worst part, your reputation will be on knife edge from the moment claim is filed. It will slowly but surely damage your business reputation whether the allegations have been proved or not. On the other hand, if allegations have been proven then you and your partners’ (employees) actions will be held accountable.
You cannot fight through all this trouble on your own. This is where your Professional Indemnity insurance will come into play. You will always know that the insurance cover is having your back in case of unfound allegations or actual breach of professional duty. PI will act as a shield for you and your business while providing cover for claims and cost inclusion for defending the case. In this way, as an accountant you will be able to continue practicing with full confidence while knowing that your reputation and assets are being protected. Definitely, PI is a must for accountants in today’s era.
People Covered With Your PI Policy – Working for an employer or on your own doesn’t make any difference in the need of getting PI cover. However, the policy can cover more people along you. Majority of the Professional Indemnity policy providers insure not only you but your business, principal employee, partner and linked entity that supported your actions during the service providing. In this way, your overall practice is covered by having PI insurance policy. You don’t need to worry about handling the claim and finances for defending yourself. Concentrate on being better the next time you cater any client.
Amount of Money Needed For Cover – The financial requirements entirely depend on claim to claim and client to client. If you are dealing with an international company then get ready for a long war where you might need a huge cover. On the other hand, it could be as easy as you think if the third party does not have a strong case. Different PI policies are being offered by the insurance providers. You can get a quote right now by selecting the details of PI policy over the internet. If your clients are usually the top companies then go for a larger cover. However, if you have just started practice as an accountant on your own then you might not need a huge policy cover.
Costs To Be Covered – There are a lot of costs which could incur in professional conduct claims. It might not be in your knowledge but the costs could be huge. Professional Indemnity insurance provides a cover for majority of the costs to be experienced during the process.
Below we have presented a list of the costs which are usually covered by most of the PI insurance policy providers:
- Court Attendance
- Employment Practices Liability
- Penalties and Fines
- Newly Created Subsidiaries
- Outgoing Employees and Principals
- Documents Lost
- Acquired Subsidiaries
- Run-off Cover
- Official Inquiries and Investigations
- Public Relations
As an accountant, it would be wise of you to gain PI policy right away. It is never a bad decision to protect yourself from any future trouble.