Why Accounting Firms Need Liability Coverage

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Accounting firms handle important business. Whenever you are dealing with clients’ finances, you run the risk of being held liable for mistakes or fraud, and that can get expensive if you have to pay for everything out of pocket. No matter how trustworthy or expert the accountants at your firm may be, you still need accountant liability coverage.

Errors and Omissions

Even the most seasoned accountant can make a small error, but small errors can cost a lot of money for your clients. Liability insurance pays the legal fees and may cover settlements if someone in your firm issued for any type of error:

  • Calculation mistake
  • Inaccurate advice
  • Bad investment tip

Legal Protection

Your team doesn’t have to do anything wrong to need legal help. If, for example, an employee of a client embezzled money from the company, your firm could have a long legal battle clearing its name of any associated wrongdoing. Depending on how long the proceedings endure, you could be looking at a large sum of out-of-pocket costs if you don’t have a good accountant liability policy.

Whether your firm deals with individual or corporate clients, it’s important to safeguard against exorbitant legal costs. Making sure you and your team are protected when legal issues arise is a worthwhile expense.