Accountants perform many services for their clients, from examining financial records to conducting audits. In the event an accounting professional commits an error, a client may choose to file a claim against the professional or accounting firm. In this situation, accountants professional liability insurance provides the necessary financial protection.
Why Clients File Claims
Most service-providing organizations require some level of professional liability coverage. Clients sue businesses for numerous reasons:
- Bodily injury
- Property damage
- Poor or inaccurate advice
The list of potential motives goes on and on. Businesses that work closely with clients have a range of exposures, and the absence of insurance leaves them highly vulnerable to legal claims. Though the chance of a claim arising is relatively small, there is no way to be too prepared. Accounting firms gain financial security when they acquire accountants professional liability insurance.
What Professional Liability Insurance Covers
During a lawsuit, accounting firms face various court, attorney, and settlement fees. Depending on the case, the professional liability insurance may cover part or all of these costs. Coverage does not extend to fees associated with criminal prosecution.
Accounting firms maintain close relationships with their clients. In many ways, this bond proves good for business, but it also leaves firms with numerous exposures. With accountants professional liability insurance, accounting firms can maintain strong client relationships while still keeping themselves financially protected.