Professional liability insurance is one way to help safeguard your hard-earned assets and reputation from a devastating financial loss that can result from a potential lawsuit or claim against your firm. Simply put, it’s peace of mind for your financial future.
As a CPA considering professional liability coverage, you may have questions such as: “How much does it cost?” or “Can I afford it?” This article provides a quick overview of accountants’ professional liability insurance and associated costs to help you understand its value in safeguarding your career and financial future.
To get started, we’ve embedded an Accountants’ Professional Liability Cost Calculator for a quick and easy estimate tailored to your firm’s profile. Enter your details and find out how much coverage might cost.
Access Your Free Cost Calculator
Estimate your insurance costs quickly with our Accountants’ Professional Liability Cost Calculator. It considers various factors specific to your practice, helping you make an informed decision.
Accountants’ professional liability insurance is not the same as other insurance coverages you may be more familiar with. Beyond price, it’s important to understand what the policy covers, Below are some factors that may influence your premium, strategies to help you reduce your cost, and considerations when choosing an insurance provider.
Professional liability insurance overview
Professional Liability Insurance for Accountants
Professional liability insurance, or errors and omissions (E&O) coverage, is essential for accountants in helping to:
- Insures you and your accounting practice from clients or other third parties claiming that your services caused them financial harm.
- Provides a defense and pays damages in the event of a covered claim.
- Be compliant; some clients or regulatory bodies may require accountants to have E&O insurance as part of their contractual obligations.
- Protect your firm’s reputation when facing allegations of errors in your professional services by helping to ensure that any claims are handled promptly, professionally, and efficiently.
Common Claims
Accountants may face claims such as:
- Negligence
- Failure to advise
- Failure to deliver promised services
- Regulatory claims
These claims can have significant financial implications and harm your professional reputation.
Factors that May Impact the Cost of Coverage
Several factors influence the cost of professional liability insurance:
- Size of the firm: Larger firms may face higher premiums due to increased exposure.
- Type and complexity of services: Higher-risk services, such as audit, can result in higher premiums.
- Claims history: A history of claims may indicate higher risk, leading to increased premiums.
- Coverage limits and deductibles: Higher limits and lower deductibles typically increase premiums.
- Jurisdiction: Location-specific regulations and risks can also play a role.
How to Save on Your Coverage
To help reduce your professional liability insurance premiums, premium discounts may be available for:
- Quality: Discounts for membership in AICPA quality centers and for demonstrating a pattern of claims-free experience.
- Risk Management Strategies: Discounts for risk management training attendance and use of engagement letters.
- Loyalty: Longevity credits reward loyal, long-term policyholders.
Choosing a Professional Liability Insurance Provider
An accountants’ professional liability policy should be more than just the paper it’s written on. When evaluating a provider, it’s important to consider quality, service, and value. Does the provider offer:
- Customizable policies: Coverage tailored to risk profile practice size, client base, and services offered
- Responsiveness: Efficient claims processing and customer support
- Financial stability: Financially stable insurer with favorable ratings by A.M. Best
- Industry experience: Specialized experience in providing coverage for the accounting profession
- Preventative risk management services: Resources designed to help you avoid a claim or minimize the impact of one.
Request a Personalized Quote
At AICPA Member Insurance Programs, our focus is helping CPAs like you protect your assets from a potentially devastating loss caused by a lawsuit or claim against your firm. Our professional liability insurance plan is the only plan endorsed by the AICPA. It offers flexible, comprehensive coverage at competitive rates, bringing peace of mind and financial security for the future. Ask yourself, “Can I afford not to have this coverage?”
To request a personalized quote or learn more, visit
https://www.cpai.com/Plans/My-Firm/Professional-Liability.