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Posted on: February 14, 2019 by Huntersure
There are many liabilities that accounting firms face every day and when it’s tax season, those liabilities become even more serious. From errors and omissions to seemingly simple mistakes to a complete system breakdown within the firm, the role of an accounting firm and its accounting professionals that help keep is based on meticulousness and the understanding that a little mishap can go a long way.
But even if an accounting firm has an unblemished track record and is touted as an operation with the best integrity and services, there could be a claim from a former client in years past that can still come up. Having a prior acts coverage policy is a much-needed component of a firm’s accountants professional liability insurance plan, safeguarding a firm so sins from the past don’t throw things off course.
As mentioned above, prior acts coverage is an essential part of an accountants professional liability insurance plan. This type of claims-made liability policy doesn’t come with a retroactive date and can cover claims against an accounting firm from acts that occurred any time before a current accountants professional liability insurance plan was initialized.
Prior acts coverage acts as a backstop for accounting firms and the professionals that work inside. This type of coverage can be used as a supplemental protective element against new claims about past mistakes. It adds peace of mind as well as protection against costly legal issues that can set a firm back both financially and reputationally.
Prior acts coverage doesn’t come with a retroactive date in its policy outline. The coverage itself provides protection for claims made during the policy time frame from a carrier used in the past. The daily operation of an accounting firm is one of diligence and careful attention to detail, especially during tax time, so having any hiccups like a claim from the past will only slow things down.
Accounting firms and their CPA’s can only anticipate claims from the past to come up to a certain degree. Having this kind of accountants professional liability insurance will help to keep financial loss from litigation minimal. This kind of protection eliminates the need to purchase an extended reporting period endorsement from another insurance carrier.
Prior acts coverage can be granted when an accounting professional or firm has coverage already in place. This is why already having an accountants professional liability insurance plan set needs to be set concretely before adding additional coverage.
Accounting firms are known for being highly meticulous and detail-oriented in their day-to-day operations. But when it comes to covering their assets from past claims, they need to be just as careful.
At Huntersure, we specialize in providing quality professional liability solutions to accounting professionals. Our Accountant Liability Insurance program provides coverage for accountants, auditors, bookkeepers, and tax preparers, so no matter where your clients lie in the industry they can have the coverage they need to protect themselves and their assets. To learn more about our operation and our Professional Liability Insurance solutions, contact us today at (855) 585-6255.
Posted in: Accounting blog Professional Liability