What Does Accountants Liability Insurance Mean?
Accountants liability insurance refers to a policy that protects those involved in the profession of accounting. The people eligible for it include, but are not limited to, professional accountants, bookkeepers, and auditors. Protection may range from providing legal assistance in the event of a lawsuit or a legal proceeding to providing money for loss of income under unfortunate circumstances related to work.
Insuranceopedia Explains Accountants Liability Insurance
There are inherent risks in the accounting profession. For instance, unintentionally overlooking fraud in a financial statement could still make an accounting professional liable. This is why practitioners (accountants, bookkeepers, auditors, auditing managers, and the like) are likely to purchase accountants liability insurance policy. This policy ensures that they are protected from future untoward situations that are work-related. These situations may include a malpractice lawsuit or falsification of documents, among others. Consequences from these include loss of professional license, loss of income, and even jail time.
An accountants liability policy will give legal assistance and cover legal fees in case of a lawsuit. It may also provide money for loss of income at the time of the litigation. It may also cover damages arising from a court action on behalf of the insured. Insurance companies also have policies for accounting firms and organizations, and not just for individuals alone.