Accountants Liability Insurance
What Does Accountants Liability Insurance Mean?
Accountants liability insurance is a policy designed to protect professionals in the accounting field. Eligible individuals include, but are not limited to, accountants, bookkeepers, and auditors. This insurance provides coverage that may include legal assistance in the event of lawsuits or legal proceedings, as well as compensation for loss of income arising from work-related unfortunate circumstances.
Insuranceopedia Explains Accountants Liability Insurance
The accounting profession carries inherent risks. For example, unintentionally overlooking fraud in a financial statement can still make an accounting professional liable. This is why practitioners, including accountants, bookkeepers, auditors, and auditing managers, often purchase an accountants liability insurance policy. Such a policy protects them from work-related risks, such as malpractice lawsuits or allegations of document falsification. Potential consequences of these issues include the loss of a professional license, loss of income, or even jail time.
An accountants liability insurance policy provides legal assistance and covers legal fees in case of a lawsuit. It may also compensate for lost income during litigation and cover damages awarded by the court on behalf of the insured. Additionally, insurance companies offer policies tailored for accounting firms and organizations, not just for individual professionals.
