As an accountancy firm, you may have been worried about the many stories in the press recently of lawsuits involving accountants, auditors and other financial businesses. The recession and subsequent collapse of many major banks seems to have opened the door to a multitude of legal disputes and claims for compensation, and it doesn’t look as if this will end any time soon.
The best safeguard for accountants is a sound professional indemnity insurance policy specifically tailored for the financially hazardous nature of your business. The following are examples of lawsuits and legal issues which could potentially destroy your business if you don’t have the right insurance:
• Negligence, breach of duty
• Loss of documents, omissions
• Staff dishonesty and fraud
• Auditing
• Poor investment and mortgage advice
• Insolvency
• Problems with mergers and acquisitions
• Extensive litigation costs
The best professional indemnity policies will cover most or all of these issues. Taking out this kind of policy not only makes sound business sense; it is also a key requirement by the Institute of Chartered Accountants in England & Wales (ICAEW) and the Institute of Chartered Accountants of Scotland (ICAS).