PROFESSIONAL LIABILITY INSURANCE
CLAIMS-MADE AND REPORTED:This policy is written on a claims-made and reported form which means the coverage is limited to liability for only those claims that are first made against you and reported to the issuing Company while the policy is in force. Also, the policy does not provide coverage for acts performed prior to the retroactive date shown on the enclosed quotation and (Upon your acceptance of this quotation) appearing on the Policy Declarations. Furthermore, a claim is subject to the policy terms, conditions, and exclusion in force when the claim is first made against you and is reported to the Company with sixty (60) days of the expiration of the policy.
- The BDP PL-1000 for AZ, and MI – also allow for “as soon as practicable or within 90 days”
- The BDP PL-1000 for CT allows for “as soon as practicable”.
- The BDP-PL-3000 for NY allows for “as soon as practicable”.
Limits and DeductiblesThe policy limit as shown on the quotation letter includes a Limit of Liability: Per Claim, and Limits of Liability: Aggregate (the Limits of Liability for a covered term). The limits of liability under the Policy may be reduced by Claim Expenses based on the option selected.
Deductible Reduction50% reduction in deductible (up to $50,000) for early reporting of a potential claim during the policy period in which it becomes known or use of formal mediation to attempt to resolve a claim.
Potential Claims Continuity DateFirst date of consecutive policies within the CAMICO Program.
Continuity of Coverage for Potential ClaimsProvides protection and helps eliminate coverage gaps for potential claims known to an insured and not timely reported by the insured, while coverage is consecutively renewed with the CAMICO Program. Continuity of Coverage removes late reporting as a basis for coverage denial as long as the insured became aware of the potential claim after the inception of the first consecutive policies.
State Taxes and SurchargesIn some states, insurance companies writing Property & Casualty insurance are required to participate in state guaranty funds and/or collect taxes on the premium. The Company is required to apply taxes and/or surcharges to all domiciled and non-domiciled CPA firms with branch/satellite offices in those states. The taxes and/or surcharges apply to the premium allotted to those operations in those states. If applicable, please refer to the Quote page for further details regarding these charges.
Premium Step Increase ProcessStatistically, claims are made against professional accounting services an average of three to eight years after the time professional accounting services are rendered. Consequently, Claims- made professional liability rating structures reflect these statistics. As your policy is renewed each year, and an additional year of prior acts coverage is accrued, your firm’s annual premium may reflect a “step increase” to compensate for this expanding time period and growing exposure. Your insurance representative can further explain and illustrate how this provision may affect your firm’s future premiums.
Effective DateThe first date for which the coverage of the policy period begins.
Expiration DateThe date for which the coverage of the policy period ends.
Retroactive Date:The earliest date from which this policy provides coverage for Professional Services and means that coverage is provided only for covered services performed on, or after your Retroactive Date.
40% or 50% offsets:Under a standard policy (100% offset; expenses within limits), the defense cost is contained within the limit of liability. With 50% offset, the most that can be spent for defense cost is 50% of the coverage limit. Once limit is reached, the Company will continue to defend you, but the cost will not be charged against the policy limits. This guarantees that a least half (or 50%) of the coverage limit will always be available for indemnity payment. Example: A policy with a $500,000 limit and 50% offset will have at least $250,000 set aside for payment of claims. Even if defense cost is $400,000, the most that will be charged against the policy is $250,000. The remaining amount of $150,000 is still paid by the Company, but not charged against the policy. Example: If you have $500,000, the total amount that can be spent for defense cost (expert witness fees, court costs, etc.) or indemnity (what is paid out) is $500,000. Spending $300,000 in defense will only leave $200,000 in indemnity. With an offset, the most that can be spent for defense cost is the percentage designated by the endorsement of the coverage limit. Once limit is reached, CAMICO will continue to defend you, but the cost will not be charged against the policy limits. This guarantees that the remaining percentage of the coverage limit will always be available for indemnity payment.
Defense Cost Outside LimitsWith Defense Cost Outside Limits (Expense Outside Limits) option, Claims Expenses will be paid on top of whatever Limits of Liability the insured has paid for. Example: A policy has limits of $250,000 and EOL option. With EOL option, no matter how much defense cost is, insured will always have $250,000 for indemnity. The Company will cease defending and/or paying Claims Expenses when the applicable Limits of Liability has been exhausted by payment of damages.
Defense Cost Within LimitsDefense Cost or Claims Expenses are included within the Limits of Liability.
Dollar One Defense:This endorsement amends the policy language for per claim deductible so that the per claim deductible does not apply to claims expenses.
Separate Defense LimitThis endorsement amends the polity to add additional limit available exclusively for the payment of Claim Expenses and will be exhausted prior to applying the applicable Limits of Liability to the payment of Claims Expenses.
Weighted RevenueThis is a weighted average of the three years of reported revenue from your application, the Last, Current and Next year. Weighted most heavily in current year.
- Cyber Security Breach Civil Proceedings (BAM) The Company will defend an Insured at any civil proceeding concerning an actual or alleged Cyber Security Breach that occurred in the rendering or failing to render Professional Services. Cyber Security Breach Civil Proceedings defense coverage is $25,000 as a supplementary payment under the Berkley Alliance Management Program.
- Multiple Claims and related Acts Errors or Omission Amendment Section II. LIMIT OF LIABILITY, A. Per Claim and Aggregate limit of Liability, paragraph 3. Multiple Claims and Related Acts, Errors or Omissions: Two or more covered Claims arising out of or resulting from a single act, error or omission or a series of Related Acts, errors or Omissions are deemed to be a single Claim made as of the date of the earliest of such Claims and are subject to a single Per Claim Limit of Liability and a single deductible. These provisions apply whether such Claims are made: (a) against one or mor Insureds, (b) by one or more claimants, or (c) during one or more Policy Periods. This mandatory endorsement removes the restriction of coverage that would otherwise apply to multiple claims and related acts, errors or omissions when a claim(s) are made after the expiration of the last policy period with the Company.
- Exclusion Claims following Insureds Suit for Fees This offer would exclude coverage claims by any person (or affiliate of such person) made subsequent to the firm’s institution of suit for payment of fees against such person. Nothing in this exclusion will preclude coverage based on the Firm’s use of arbitration or mediation to resolve a fee dispute.
- Additional Insured This endorsement amends the policy section, Who Is An Insured to include the named entity on the endorsement as an Insured to the policy.
- Excluded Entities This endorsement amends the policy to exclude coverage for claims either form services provided to or relating in any way to specifically named entity.
Misappropriation of Client Funds(Limits within and availability for increase) Definition (See Policy Language) Currently the policy provides a Sublimit amount for Misappropriation, Theft or Embezzlement of a client’s funds in the amount of $100,000 in the CAMICO Mutual Program and (or the lesser of $500,000 or the Per Claim Limit of Liability stated on the policy Declaration in the Berkley Program). This limit may be eligible for increase for an additional premium and is subject to Underwriting Review.
Base vs Total Premium (Definition)Base Premium – Premium before any additional premium charges or credits. Total Premium – Final premium after any additional premium charges or credits have been applied.
Orientation CreditIn our ongoing effort to provide the most comprehensive risk management program to policyholders, CAMICO has created an Orientation Credit Program. The program is designed to raise awareness and encourage new policyholders to take advantage of CAMICO’s risk management services.
For CAMICO Mutual Insureds, new CAMICO policyholders qualify for participation in our Orientation Credit Program. This program offers premium credit to eligible new firms over a three-year period (Year 1: 15%, Year 2: 10%, and Year 3: 5%). No credits will be applied after the third year. Continued eligibility for the Orientation Credit in years two and three will be dependent on firms satisfying the onboarding requirements for each respective year. To receive the first year 15% credit on your premium, at least one partner/owner will need to complete an online risk management orientation. For Berkley Alliance Management, new BAM policyholders will receive a one-time 6% LP Orientation Credit by completing the survey.
5% Suit for Fees Credits:Deletes Item II LIMIT OF LIABILITY, C. Deductible, 4. Co-Pay Obligation in Addition to Deductible Following Insured’s Suit for Fees and Item VII Policy Conditions, D. Consultation Before Suit to Collect Fees and adds the following policy exclusion: Any Claim made by any Person after an Insured has sued such Person (or Affiliate of such Person) to obtain payment of fees for Professional Services. This exclusion does not eliminate coverage for any Claim made after an Insured’s use of arbitration to resolve a fee dispute with the Person making the Claim.
EMPLOYMENT PRACTICE LIABILITY
Limit per Claim and AggregateThe policy limit as shown on the quotation letter includes a Limit of Liability: Per Claim, and Limits of Liability: Aggregate (the Limits of Liability for a covered term). The limits of Liability under the Policy may be reduced by Claim Expenses based on the option selected.
Independent ContractorsIndependent Contractors “On-Site”: Defined as independent contractors/per diem workers that are on site. For example, an individual working in a non-client related area, such as IT/telephone/data maintenance, would be considered an independent contractor. Independent Contractors “Off-Site”: Defined as independent contractors/per diem workers that are primarily at a remote location (remote from the employees). For example, an individual working in a non-client related area, such as IT/telephone/data maintenance, would be considered an independent contractor. Coverage is available, subject to underwriting review.
Retroactive Date:The earliest date from which this policy provides coverage for Employment Practice Related matters, coverage is provided only for covered matters arising on, or after your Retroactive Date.
Per Claim deductibleThe maximum amount the insured is responsible for paying toward the loss associated with each reported claim.
Endorsements: Independent Contractor EndorsementCoverage afforded to employees of the named insured who are Independent Contractors of the Named Insured while acting within the scope of employment by the Named Insured.
CAMICO Mutual Insurance
- CyberCPA Coverages Privacy Breach Response Costs, Notification Expenses, and Breach Support and Credit Monitoring Expenses: Coverage for reasonable legal, public relations, advertising, IT forensic, call center, and credit monitoring fees. Cost to provide identity theft education and assistance to affected individuals; and postage expenses incurred by the firm in response to privacy breach. Network Asset Protection: Coverage for reasonable and necessary sums required to recover and/or replace data that is compromised, damaged, lost, erased, or corrupted due to accidental damage or destruction of electronic media or computer hardware, administrative or operational mistakes in the handling of data, or computer crime/attacks. Coverage also includes business interruption and extra expense coverage for income loss resulting from a total or partial interruption of the firm’s computer system, which is caused by any of the above events. Cyber Extortion: Coverage for extortion expenses and extortion monies incurred as a direct result of a credible cyber extortion threat Cyber Terrorism: Coverage for income loss and interruption expenses incurred as a direct result of total or partial interruption of the firm’s computer system due to a cyber terrorism attack
CAMICO Berkley Alliance Managers
- Cyber Security Breach
Coverage for the Insured’s computer network Security activities which result in:
- The failure to prevent the introduction or transmission of a computer virus or any other malicious cod, but only if such computer virus or malicious code affects the data, software, firmware, systems, or networks of the Insured’s clients.
- The failure to provide the Insured’s clients with access to the Insured’s website or computer networks when the Insureds clients have authorized use of such websites or computer networks.
- The failure to prevent unauthorized access to, or use of, the Insured’s data, software, firmware, systems, or networks containing the Content of the Insured’s client.
- The unauthorized destruction, deletion or corruption of Content owned by a client of the Insured.
- The failure to prevent the theft of, unauthorized or illegal disclosure of or loss of Content that resides on the Insured’s computer networks.
- Cyber Security Breach Investigation
If an Insured reports a Cyber Security Breach as a Claim or Potential Claim CAMICO will engage a qualified firm on the Named Insured’s behalf to:
- Investigate the breach
- Notify any parties affected by the breach
- Perform credit monitoring services from the Insured’s clients’ individual personal data or corporate data lost because of the breach
- Restore or recreate, if possible, any of the Insured’ clients’ lost content caused by the breach.
The maximum the Company will pay pursuant to this Supplementary Payment provision is 50,000.
- Privacy and Client Network Damage Liability: This endorsement clarifies how coverage for privacy claims and client network damage claims are covered under your professional liability policy. This coverage requires that claims must arise out of your covered professional services.
- Covers network damage: a) To your client’s network arising out of a security breach of your network b) To your client’s network arising out of the transmission of a computer virus to your clients network.
- Provides $12,500 coverage for defense costs to defend you at regulatory proceedings related to the actual or alleged violations of privacy laws or privacy breach notice laws.
- Covers the costs to notify third parties of unauthorized disclosure of non-public personal Information.
LOSS PREVENTIONRisk management services available to all policyholders through advice hotlines, Alert communications regarding time-sensitive subjects, and a member website
Tax GuidanceCAMICO provides no-cost guidance related to complex technical estate, gift, and corporate income tax issues. We will discuss applicable IRC sections, revenue rulings, and other research materials that can serve as a springboard for further research by your firm. Alternatively, we will review your firm’s fully researched tax treatment of a complex transaction and discuss possible alternate treatments and highlight other issues relative to the facts provided.
CPECPE credit can be obtained from webinars and webcasts, provided by CAMICO experts, and self-study courses from Checkpoint Learning. As part of our risk management program, CAMICO provides training and NASBA-accredited CPE with a risk management focus through a number of educational opportunities that are available at no cost to all members of a policyholder firm:
- Webcasts (an average of 20 free CPE credits per year)
- Live in-firm presentations to groups of 40 and up — topics can be tailored to meet the specific needs of the group.
- Speakers Bureau
- Online self-study courses
- Firms with smaller audiences are welcome to contact Loss Prevention at firstname.lastname@example.org to schedule a webcast or livestream presentation specifically for their firm.
Members-Only Site (MOS)CAMICO’s comprehensive Members-Only Site puts a wealth of tools and resources at your fingertips. You will find a wealth of practice and risk management resources available to your firm.
- Knowledge Tree — a searchable reference library containing hundreds of documents organized by risk management area
- Current and archived IMPACT newsletters, war stories, selected claims, alerts, and more
- Engagement Letter Resource Center with 100+ sample letters and checklists for client screening and disengagement
- Additional Resource Centers on Tax, Accounting & Auditing, Cyber/Data Security, Fraud, Ethics, Subpoena Services, and Trustee/Executor Services
Risk ManagementCAMICO policyholders have unlimited use of hotlines for advice on a wide variety of practice and risk management areas, including client screening, engagement and disengagement letter review, billing and collections, documentation, internal controls, as well as other key practice areas of concern for CPAs today. We also offer a dedicated Accounting & Auditing hotline to answer your questions about SSARSs, conflicts of interest, ethics, and more. Our Loss Prevention specialists deal exclusively with the concerns and issues facing CPAs and consult on more than 7,000 phone calls per year from policyholders seeking guidance on risk management issues. Consider: The estimated cost to review an engagement letter could range between $150 and $350. Such services from CAMICO are provided at no additional cost and can result in significant annual savings for your firm.
Potential ClaimsAt CAMICO, we are dedicated to preserving a CPA firm’s reputation with a proactive approach to claims handling. CAMICO’s experienced specialists provide counseling on potential claims in order to avoid a claim or reduce its impact. CAMICO encourages policyholders to notify us of potential claims situations as early as possible. Early reporting may qualify policyholders for a reduction in deductible, and expenses CAMICO incurs to help resolve a situation before it becomes a claim do not affect the policyholder’s deductible or limit. Consider: Outside counsel would have cost each of these policyholders between $2,000 and $5,000 for services provided at no charge by CAMICO.
AdviceInsurance alone is not a solution for reducing risks. That is why CAMICO’s program goes beyond just providing CPA insurance options. Policyholder firms have unlimited access to CAMICO’s proven approaches that have helped numerous CPAs build thriving firms and avoid damaging claims. Our Loss Prevention specialists have an average of 20 years of experience in risk management per individual, and an average of over 25 years of experience in public and private practice per individual. Our Claims specialists have an average of over 20 years of claims experience per individual.
Deductible ReductionFor Professional Liability only CAMICO offers 50% reduction in deductible (up to $50,000) for early reporting of a potential claim during the policy period in which it becomes known or use of formal mediation to attempt to resolve a claim.
ClaimsClaims Counseling Claims situations can be extremely stressful. With your practice and reputation at stake, it is easy to imagine the worst. In the event that a matter turns into a claim, CAMICO is with you every step of the way. Our dedicated team of claims specialists and outside attorneys will guide you through the process.
- The Claims department handles an additional 2,000 calls per year on new matters (potential claims and reported claims).
- We are able to keep about 85% of potential claims from becoming actual claims.
- All money spent on potential claims is a benefit to policyholders and is not charged against the deductible.