Businesses protected from financial loss with professional liability insurance
A separate coverage can be added to existing insurance policies that protects professionals in the event of a client's claim that they have suffered a financial loss as the result of an error or omission that was committed by a company while performing and delivering their professional services.
Whether you are running a small home-based business or a multi-million dollar industry, it is important to plan for disaster mangement to protect against unexpected circumstances.
Professional Liability Insurance is a safeguard for employers and employees. Before joining a company for the first time or changing jobs, this policy is protection against claims that pertain to professional malpractice by current employers at a future date. Employers are also protected against future professional liability claims.
If services are provided that involves pay for advice, such as an accountant, software developer, planner or architect, any profession where the client might sue for damages resulting from a faulty performance of the service, Errors and Omission (E&O) insurance should be considered. Many sites are available on the internet that provide fast quotes for any type of professional insurance.
Professional liability insurance is similar to malpractice insurance, protecting professionals from liability when an action – or failure to take action – results in injury or financial damage to a client. Key features to look for in a policy include:
A broad definition of professional accounting services that includes both advice given and services performed as an accounting professional;
- Automatic coverage for newly acquired entities, and for predecessor firms;
- The ability to reduce the deductible when claims are settled by alternate dispute resolution;
- A deductible credit for the use of engagement letters for services that don't involve an audit or other attestation services;
- Payment for defense costs in disciplinary proceedings and reimbursement for lost earnings due to court appearances;
- Defense coverage for discrimination charges;
- Options to extend the claim loss-reporting period, including extensions that cover retirement, and death and disability, for sole practitioners.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.