Accountants Professional Indemnity Insurance, also referred to as “Errors & Omissions” Indemnity covers your Legal Liability for losses following negligent advice, services or designs you have offered to a client. Professional indemnity insurance will pay the legal costs and expenses in defending a claim, as well as compensation payable to your client, to rectify the error and the consequential losses thereby suffered.
Personal taxation – Failure to lodge tax returns led to client losing tax repayment and interest.
Personal taxation / pensions – Incorrect advice as regards pension payments and alleged concealment of commissions.
Accountancy – Lender sought reference for a business’s mortgage. The business failed and the subsequent property sale failed to cover the loan.
Trust – Two partners were Trustees to a family Trust. They delegated investment authority to a company that subsequently collapsed. They also failed to minimise tax.
Company tax – A firm, acting as accountants to a profitable company, introduced their client to a tax mitigation consultancy. Schemes of tax mitigation were embarked upon that proved to be fraudulent from a tax perspective.
Auditing – Failure to spot a serious fraud due to inadequate audit procedures. The cost exceeded the limit of indemnity of £1million.
Investment advice – Poor investment advice led to serious loss to a Trust.
Accountancy – Confusion as to the role of an accountancy firm, whilst acting for the purchaser of a business. The purchaser thought that the accountancy firm were looking at the commercial viability of the acquisition. The firm thought that their instructions were limited to the preparation of cash flow forecasts based on given information for the purpose of raising finance.
Fraud – An employee in the firm stole clients’ money.
Insolvency – Failure to realise full value of assets.
Most accountants policy wordings follow a very similar format, most policies are written on a ‘any one claim basis’ with legal defence costs payable in addition.
Traditionally cover will be on a civil liability basis, unless specifically excluded (which is unusual) the policy will include cover for negligence, liability for dishonesty of staff, directors and partners, liability for lost documents, libel and slander, breach of warranty of authority, etc.
In respect of members of ACCA there will be a difference in conditions clause – this is required to demonstrate that the policy offers at least the same cover as the minimum standard required.
The cover provided by the policy will operate for all the activities that would be expected of an Accountant, including personal appointments, such as directorships, as liquidator, as trustee, but only in respect of an Accountant’s usual services. It would be normal for cover to extend to the cost of representation at professional tribunals.
Just give our expert advisors a call. We will go through the information required by our insurers, and answer any questions you may have about your cover. We may ask you to complete a short proposal form if necessary.
Once we have the information from you we will approach our partner insurers to obtain the most competitive quotation with the widest cover. Each of our clients have different requirements in terms of time so however urgent it is we will work with you to meet deadlines.