What’s the Right Policy Limit for Your Firm?

If one had to choose the question most frequently asked by CAMICO policyholders, the likely winner would be, "What should our policy limit be?"

This is not an easy question to answer, which may explain why it is asked so often. Regardless of your level of expertise in CPA professional liability, risk management and insurance, the answer requires a careful consideration of a variety of factors that run the gamut from the relatively well defined, such as regulatory requirements, to the more subjective, such as the "sleep well at night" factor.

Preparing for the Next Recession

Economic conditions historically have a significant impact on CPA professional liability claims. When the economy is doing well, and businesses are relatively flush with money, people are less likely to notice funds missing. Fraud therefore tends to flourish and go undetected in good times.

When the economy takes a downturn, capital starts to become more precious, people look more closely at accounts, and missing funds are more often detected. In general, there are more claims and larger claims reported in an economic downturn.

Trustee Red Flags and Best Practices

Many clients look to CPAs as the natural choice to fulfill the trustee role, manage the assets, and carry out client wishes. For CPAs good at managing and minimizing the unique risk attributes of a trustee role, trustee work can be satisfying and rewarding. On the other hand, if a CPA underestimates trusteeship risk, what may appear to be a safe and simple role can become a Pandora's box of sibling rivalries, aging parental battles, competing interests, disruptive lawsuits, and financial losses.

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Latest Articles

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    How to respond to subpoenas

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    The New 'Hosting Services' Interpretation

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