Being a CPA isn’t all about knowing the past about your career field, it’s also about staying up to date on current trends and information when it comes to liability claims, or else you might be held accountable when there are ways around it.
Just because it hasn’t happened to you, doesn’t mean it won’t. With how expensive legal claims can be without any form of liability protection insurance, you should always stay alert and be on top of it. Instead of putting yourself at risk, you’ll want to invest in a type of liability coverage that’s not only comprehensive, but one that’ll allow you to rest easy if someone doesn’t try to come after you. You should also inform yourself on the areas of risk in today’s market while you’re at it. Be aware of these 8 liability pain points as an accountant:
Data Protection
It’s no secret that the World Wide Web can be a dark place, and your information can be stolen from you within an instant. Whether your firm gets hacked, someone accesses an employee’s account through an unauthorized method, or someone’s device has been stolen, you should always make sure your clients are protected – that’s your job! When you don’t protect your client’s financial information, you will most definitely be held responsible. When you have coverage against this, you can save yourself if something bad happens.
Let’s face it, you don’t go out and seek potential hacking situations, so while compromised information isn’t necessarily directly your fault, there should be some protection in line for both you and your clients. Using encrypted cloud spaces will allow you and your client’s information to stay safe in case someone tries to get into the account.
Mergers
Another huge liability pain point is a merge. With the market crash in 2008, the game entirely changed, and now, acquisitions and mergers are practically normal. Since mergers can be extremely high in exposure for businesses, this makes them susceptible to financial pain. Always make sure you’re covered during this time.
Fraud
If you don’t catch any inconsistencies with bookkeeping, you could face a claim from your client, as it could look like there is possible theft going on. Not only should you assess a type of quality control, but you should also make sure you’re covered during these instances.
Engagement Documentation
Always make sure to deliver a letter of engagement so your client knows exactly what they’re getting and what your obligations are as a CPA. Having coverage in case someone tries coming after you is important.
Transfer of Wealth
Another liability point is when there’s a wealth transfer. Since baby boomers have loaded up their accounts with trillions of dollars, and they want to keep their family stable, a CPA’s job is to guide them through this process with ease. Since there’s a lot of money at hand, you should always make sure you’re covered during this time.
Affordable Care Act
As a CPA, your job is to correctly file and help a client with their health portion of their finances and taxes. With the Affordable Care Act being so new, and required, there are many still left in the dust on how to operate. If you don’t file correctly, your client may come after you.
Partnerships
While a type of common exposure event, there have been a surge in claims because of this. When an accounting firm is intertwined in a business partnership, it may not work out and it will dissolve – or someone wants additional money. When this happens, you may be tested, and someone may come after you.
Protect Your Business and Most Importantly, Yourself
As a professional, you should always seek out the best and safest route for yourself. When it comes to insurance, you should make sure you’re covered in many types of instances, and not just a few. Paying a little more will save you in the long run, as liability insurance for an accountant will act as a safety net in a time of desperate need.
Not sure if you’re covered? Contact us today about your liability insurance needs:
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