Covering the bases: Why Your Firm Needs Professional Liability Coverage

December 12, 2013
Many small businesses fall into the trap of complacency. We categorize complacency as a “trap” because it is often the product of sustained success that causes a business to feel secure and set in their ways. In the case of small CPA firms, many partners and solo practitioners feel a sense of security, doing the same type of work for the same clients each year. They often ask: “Why should I care about losing my personal assets?” At Protexure Accountants, we consider ourselves advocates for the small accounting firm. Along with protecting your firm against claims, we consider it part of our job to inform you as to why you need coverage. So, even if you have a good practice, a steady group of clients, and practice in a relatively safe area of practice, your firm is not exempt from a malpractice claim. We’re here to help you prepare. There is a common misconception that small accounting firms who prepare business and personal tax returns, bookkeeping, and compile financial statements simply have no need for professional liability insurance. No matter what your firm does, it is important to realize that claims can arise from any client or situation, and they often come suddenly and unexpectedly. Many of our clients, being small firms, are involved in the so called “low-risk” areas of practice. We estimate that: 50% of claims against CPAs are tax-related 10% of claims against CPAs come from performing bookkeeping functions for clients, and 10% of claims against CPAs come from compilation and review. Even with this information, you may consider your firm exempt from a professional liability claim. Some of your clients may be some of your best, long term friends. You may  know your clients, but you don't know everything surrounding their respective businesses. You do not know, nor is it possible to know their employees that may be stealing from them, or the character of the bankers that may be lending them money. The list goes on and the claim-triggering factors can be endless, even if you have only one client. These are just some of the reasons that are putting your personal assets and your practice at risk. If you are a small CPA firm seeking professional liability coverage or are looking to switch, please visit or call us at (888) 803-9898 for a quick, free quote. Our application can be completed online, saving you time to focus on running your practice. For the latest on small firms, including business tips and recent developments, visit us on Facebook, Twitter, and the Protexure Accountants blog!

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