Professional Indemnity for Accountants: Necessity or obligation?

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If you offer your knowledge, skills or advice as part of your profession – either as a self-employed individual or for a company ­ you should consider taking out professional indemnity insurance.  Few of the reasons why as professional you should have professional indemnity insurance are written below:

  • Errors and omissions can occur at any time, to anybody even if he / she is the most detail oriented individual. What happens though in the case that error or omission results to a financial loss of a third party? A professional indemnity insurance is what will provide security and piece of mind.  
  • Due to the economic crisis there are many examples of people filing cases against professionals for a chance to receive some extra money. The accuracy of the complaint and whether was true or false might take up to five years to be proved. All the money spend on lawyers’ fees and evidence must be get off the accountants’ pocket. A simple professional indemnity insurance can get you out of this trouble by just paying your annual premium.
  • All the developed countries around the world believe that a professional indemnity insurance is a sign of professional credibility. Therefore, it can be said that it is good for the client to know that even if something goes wrong there is an insurance policy which will cover any potential lose.
  • Even in the worst case scenario an error or omission occur and a third party sue you for negligence all the damages awarded by court or by arbitration must be paid from your own pocket, regardless of the amount. By holding a valid professional indemnity insurance, the damages will be paid by your insurer and not by you.

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