What’s the Right Policy Limit for Your Firm?

One of the most frequent questions asked by CAMICO policyholders is, “What should our policy limit be?” This is not an easy question to answer, which may explain why it is asked so often.

The answer to the question 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

  • 08 Jan

    Avoiding estate tax return claims

    Late-filing penalties for estate tax returns are often used as grounds for professional liability claims against CPAs, in large part because of their cost: Given the steeply progressive tax rates for estate tax and rapidly accruing penalties, they often exceed $300,000. Here are some tips ... read more

  • 20 Dec

    Ransomware Still a Problem – Pre-Tax Season Cyber Tips

    CAMICO's reported cyber-related claims show hacker attacks on CPA firm email systems were the most frequent cause of losses for firms for the 14-month period from July 2018 through August 2019. These claims accounted for almost two-thirds of cyber-related claims.

    ... read more

  • 05 Dec

    Six Tips for Safe Holiday Celebrations

    Employer-hosted events to celebrate the holidays and thank employees for jobs well done often come with liability and other risks when the events include alcohol.

    "Impaired judgment and lowered inhibitions as a result of alcohol consumption give rise to a variety of dangers,... read more