Many accountants rely on CPA professional liability insurance. Any accountant with exposure should ensure they have proper coverage. These can include the following:
- Tax accountants
- Accountants for closely-held businesses
- Accountants for high net worth individuals
- Tax accountants
Each of these CPAs is liable for their performance. Mistakes pertaining to errors and omissions (E&O) in legal papers, tax forms, or any other legal document that lead to monetary loss may trigger a suit. Accountants may protect themselves with proper insurance.
Consult With a Provider
Accountants needing CPA professional liability insurance should consult with a provider to determine their risk landscape, and ensure proper coverage. A consultation can include the following steps:
- Coverage placement – many policies start with an umbrella policy, then include addendums to address particular needs.
- Coverage analysis – ironically, CPAs are often not cognizant of their own financial paperwork. An insurance provider can detail the current protection plan and explain the purpose of each item.
- Risk management consulting – two CPAs in the same risk environment may not carry the same coverage. This is because each CPA will have his or her own level of risk adversity. Conservative participants will carry a generous amount of insurance in order to protect against a wide range of possibilities. Less conservative clients will choose a leaner policy, with lesser premiums, but higher exposure. The provider will work with the CPA to identify the level of risk he or she is comfortable assuming.
Through this process, accountants can arrange the proper CPA professional liability insurance that best suits their practice.