As a CPA, you need ‘Errors and Omissions’ insurance to cover damages from an error committed by your firm in providing professional services; and to protect the assets of your firm and partners from the financial consequences of a claim.
However, CAMICO frequently hears of CPAs who choose not to purchase Professional Liability Insurance because they don’t think they need it, or that, they do not think they will get sued. But the truth is that you are putting your practice at risk if you don’t carry PL insurance. Here are 4 commonly heard reasons why CPAs choose not to purchase insurance – and how this approach is risky.
- “I have a low risk practice, I only do tax work” – CAMICO’s claims experience shows that tax claims are by far the most frequent and cost on average $53,000. A single claim of this size could do irreparable damage to your firm and practice over the long term
- “I’ve known my clients for years, they are my friends. They are not going to sue me, so I don’t need insurance” - CAMICO’s files are filled with cases where a good CPA-client relationship has turned sour. Most often friendships are destroyed over claims situations. Once money is involved, that friendship usually crumbles and could lead to a lawsuit. Not having any kind of insurance to protect you from this type of scenario poses risk to your practice.
- “If I don’t have insurance, I won’t get sued” – Your opponent does not know that you don’t have insurance. Worse yet, that is not going to stop an attorney from suing you, or going after your personal assets which are now exposed. So not only have you put your practice in danger, but now your family can be impacted.
- “I follow all the rules and regulations. I don’t make mistakes, so I don’t need insurance” - A client may sue a CPA, not because of the work they did, but due to the disappointment about the outcome of the CPAs’ services, or failure to meet their expectations. So even if the accusations are groundless, and you didn’t do anything wrong, the time and cost to defend your firm against such claims can impact your firm’s bottom line in terms of expenses. Not to mention the valuable time taken away from your business and clients. Having a robust ‘Professional Liability’ policy protects you and your firm from such situations.
Don’t get caught in a claims situation. Protect your firm with CAMICO’s robust ‘Professional Liability Insurance’ policy and risk management services. Get A Quote Today!