Accountant? You'll need insurance!
Imagine, that in these difficult economic times, accountants in the UK
are being held in the highest regard as one of the most trusted
resources for advice for the majority of those in need of financial
advice or management. Trust in banks, lawyers and other financial
sources has plummeted according to a recent survey, but an accountant is
viewed as a reliable and trusted friend.
As an accountant, you know that the responsibility of handling the
finances of individuals or other businesses can be risky, and you can be
vulnerable to the effects of poorly given advice or mistakes. That's why
insurance for accountants can be complicated, and they need to do their
homework by researching online to learn what types of insurance will
best serve them and create a tailored package that will meet their
Accountants need a variety of insurance cover. Let's start with
Professional Indemnity Insurance. If your client should suffer a
financial loss because of advice you gave him, Professional Indemnity
Insurance will likely cover the claim made against you as well as the
legal expenses. In many cases, clients will ask if you have Professional
Indemnity Insurance and will only sign on with you if you do. Most
insurance companies that provide Professional Indemnity Insurance offer
cover up to £5 million.
Professional Indemnity Insurance will cover you for negligence should
you give the wrong advice or make a mistake in your accounting work. If
a claim happens because of a civil liability against a client, you will
likely be covered. If you caused an infringement of intellectual
property rights such as a trademark or copyright, you will likely be
covered. Should a client's documents be stolen, lost or damaged whilst
in your care, you will likely be covered. Depending upon the policy you
choose, you may also be protected from your own personal losses caused
by a dishonest employee or freelancer contracted by you and under your
You, as an accountant, may feel totally confident in the work you
produce, but because you are providing a professional service, any
client can challenge your work, and you are vulnerable to a claim if
you've failed to meet a client's expectations and cause financial loss.
There is really no exception to the rule when it comes to Professional
Indemnity Insurance for accountants. It is absolutely essential if you
are to protect your clients, your business and your peace of mind.
Public Liability Insurance is also a necessity for an accountant,
because you come in contact with members of the public all of the time.
Public Liability will cover you should you cause damage to a person or
their property or cause injury to them whilst you are working. No matter
how hard you try, an accident can happen to someone as a result of your
business, and a claim can be filed for something as minor as spilling
water on a client's computer. And, any employee's actions whilst at work
cause an injury to a member of the public or a client, a Public
Liability claim can be filed against your business. Most Public
Liability Insurance policies can be purchased as a separate policy or
part of a package that includes other cover like Employers' Liability
Insurance and Product Liability Insurance.
Employers' Liability Insurance is necessary if you employ one or more
people in your business. You are legally obliged to have Employers'
Liability Insurance if you have a staff, no matter how big or small. It
is a requirement that an employer has at least £5 million of cover in
place. This insurance protects you and your accounting business against
any claim that is brought against you by an employee who is injured or
becomes ill whilst employed or if the employee can trace the illness
back to your business as the cause of that illness. That's why it's
important to have detailed records of all current and past employees
including temporary workers, part-time workers, sub-contracted workers,
students and volunteers.
You must have a certificate proving you have Employers' Liability. This
certificate must be placed in a spot where all employees or visiting
inspectors can read it. If you fail to produce this certificate, you can
face fines of up £2,500 for every day without it. Employers' Liability
will likely cover the cost of the claim brought against you, as well as
any award to an employee should a case go against you as well as any
legal fees incurred. Because there are some exemptions to Employers'
Liability Insurance like employing family members, it is wise to study
Employers' Liability policies on Internet websites that are dedicated to
insurance for professional people.
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