Despite what many accountants think, not all professional liability policies are created equal. At a minimum, the best policies offer the broadest coverage at the best value with a trusted insurance provider.
Some policies, however, go above and beyond. They’re not just good; they’re excellent. These policies differentiate themselves by providing the highest level of service and offering various value-added benefits, such as risk management and education opportunities to invest in its policyholders.
Whether you perform bookkeeping, tax preparation, accounting, or CPA services, you have professional risks that must be guarded against. A professional liability policy protects you from real or alleged omissions, professional negligence charges, and claims of breach of duty and misleading statements.
In short, a professional accountant policy protects you from claims resulting from the performance – or failure to perform – your professional services.
The details of your professional policy depend on your specific areas of practice as well as the coverage you need, but there are some things to look for to get the most out of your insurance policy.
1. Find an A-rated carrier
An A-rated carrier means the insurance company has the highest level of creditworthiness. If a claim arises, the last thing you want to worry about is the solvency of your insurance company. An A-rated carrier gives you the peace of mind that if a claim arises, your policy will respond.
2. Select a company that values education
A first-class insurance company cares about its policyholders and takes a proactive position when it comes to claims. Forward-thinking insurance companies educate their clients on insurance and risk management principles.
Look for a policy that provides information and educational resources. Examples of these “extras” include:
- Free ethics courses
- Educational webinars on matters of importance to CPAs
- Articles about accounting trends
- Risk management and loss control courses
3. Early claim intervention methods
A hallmark of a great professional insurance policy is early claim intervention. Look for an insurance carrier that gives you tools to use early in — or even before — the claims process.
For example, a policy may offer a free hotline where you can speak to accountant claims professionals. They can answer your questions about potential claims or even ethical dilemmas. Such a service is invaluable in small or sole proprietorship practices where it’s vital to have a risk management professional to share perspective and help protect your practice.
A hotline is invaluable in helping accountants wade the waters of professional liability. They are free, and policyholders can use them as often as needed.
4. Additional aid and resources
Ample resources are another hallmark of a top of the line insurance provider. An excellent policy takes insurance and liability resources one step further to offer online tools designed to help your firm’s overall risk management strategy.
For example, look for a company that offers online engagement letters. Engagement letters are a highly useful risk management tool. A good insurance policy offers resources about using engagement letters.
Other resources to look for include claims data and statistics about your areas in your profession. The more you know about professional claims and common pitfalls, the better your risk management plan will be.
5. Proven and thorough claims handling process
Despite the best risk management strategies, sometimes a claim can’t be avoided. If you find yourself dealing with a professional claim, you need the support of the best professional insurance experts.
Look for an insurance partner who offers a claims triage system. A claims triage system is an established protocol an insurer follows when a claim arises. It’s an orderly and organized first response to your claim or potential claim.
A claims triage will assess an incident, subpoena, or claim to determine the nature and facts surrounding the event. There will also be a study in mitigating damages. The triage will also determine possible outcomes, defenses, and the need for further expertise. At the end of the day, a properly executed claims triage process can give you the reassurance that when you need to rely on your insurance carrier, they’ll be there for you with the expertise you need.
The best policies combine resources and response
The most effective professional policies combine ample risk management resources as well as fast and effective response to claims. McGowan’s CPAOnePro insurance package is the perfect solution for accounting firms, CPAs, tax preparers, and bookkeepers. The benefits set it apart a number of other policies on the market. The policy includes:
- Annual ethics courses
- Quarterly lunch and learn live webcasts
- Industry news roundups to help you stay ahead of trends
- A comprehensive library of letters
- Risk management hotline for early claim intervention
- Webinars that count as CPE credits