Providing advice relating to individuals finances is a complex and meticulous area that requires a high level of knowledge and expertise. Incorrect calculations or small oversights could almost certainly cause financial loss to their clients.
Accountants have always been caught in the crossfire of duty of care liabilities. Audit and tax activities contribute to a majority of liabilities. Claims tend to be clinical in value relating to failure of tax returns, interest and penalties, and failure to elect partners and failure to detect fraud.
High level exposure on PLC Companies, merger and acquisitions, due diligence, receiverships and insolvency practice and tax planning can cause large losses to the professions. If the unfortunate were to happen, it can place an impact on the businesses own finances and reputation and, with this in mind, it is important that having the right security and professional understanding behind your business can help dissolve and protect many of these complications.
If the firm is accredited by the ACCA, CIMA and ICAEW then their members will require minimum limits of indemnity in order to practice. Different areas of practice pose a range of risk levels with premiums being reflected, this being said, generically accountants are seeing premiums at their lowest for many years although the HMRC appear to be tightening their belts and imposing record fines for breaches of tax regulations with severe financial implications.
The general claims being seen from this sector arise form oversights of payroll, bookkeeping and accidently sending accounts to alternative sources, all these points needing a professional insurer to support these allegations.
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