No amount of expertise, organization, documentation, or professionalism can shield your accounting practice from being accused of malpractice. It’s the nature of today’s society for people to point fingers at others when things don’t go their way. That’s why it is so important that you protect yourself by investing in liability insurance. Though the idea may irk some who feel it is unnecessary, what it offers is well worth the expense. Let’s take a closer look.
Just as life, health, and homeowner’s/property insurance protect against the unexpected. Professional liability insurance provides coverage for all of the costs that come when your practice is named in a malpractice lawsuit. These costs include:
- Legal defense costs
- Settlements and judgments if you are found liable
Though you may object in principle against having to pay for attorneys’ fees when you know that you are meticulous in your approach to your professional responsibilities, you still have to pay an attorney, whether you are innocent or not. Additionally, being able to tell clients that you have insurance coverage is a powerful indication that your firm takes responsibility for errors.
Professional liability insurance against malpractice claims will specifically cover any client losses that occur due to errors and omissions made on financial statements, in tax filings, and audits. It also covers harm caused by failure to perform duties to the required standard and harm caused by failure to meet professional standards of care. Some policies even provide compensation for income you’ve lost due to the time spent on your legal defense and for marketing expenses to generate new business or restore credibility.
Most professional liability insurance companies will also offer the opportunity to purchase additional coverage for the costs of regulatory investigations, subpoena assistance, data breaches, and cyber liabilities. These last two represent an increasing concern for accountants and businesses of all types.
While having an experienced attorney to represent you in a malpractice claim is essential, having an insurance policy to help pay for legal expenses simply makes good sense. If you are facing the threat of a malpractice claim and would like to learn more about how we can help, contact our firm today to set up a time for us to meet.