Why do Accountants and Auditors need Professional Indemnity Insurance?
In most global jurisdictions accountants and auditors are required to carry professional indemnity (PI) and most do through specialist schemes. If not all, many are expected to self-insure themselves in order to work with and offer auditing and tax advice services to their clients.
But what do you do if your accountants or auditor practice has had previous claims, complaints, or overseas exposure or you are acting for listed companies? Immediately you would be considered ‘high risk’ for such schemes and would not be offered any insurance coverage.
As an independent and international Lloyd’s of London Brokerage, we work with specialist accounting and auditing firms who often have complex exposure and auditing requirements, often with international and publicly listed clients who many have had previous claims or required increased limits due to the nature of their business.
We work with clients both in the UK and internationally, who are often unable to secure insurance from domestic insurers and associations due to the complex and high-risk nature of their work.
As a specialist Lloyd’s Broker, we work with specialty syndicates and underwriters at Lloyd’s of London, who understand the complexities and challenges faced by our clients, thus offering a flexible approach to underwriting.
All policy wordings and coverage are in line with mainstream institutes and associations in the UK and Ireland, giving you and your clients’ complete peace of mind.
What does out PII for Accountants and Auditors cover?
Recently accountants and auditors have been negatively portrayed by the press in cases of professional negligence (regarding cases of incomplete audits for financially distressed publicly listed firms).
Our specialist coverage doesn’t just cover acts of negligence or breach of duty – but extensions apply as far as business risk and reputational damage, when a high profile claim is pending. This is to ensure that business is able to continue operating as usual whilst on-going investigations may take place.
Claims Made vs Claims Occurring?
It is essential that there is no “gap in cover”, both from a regulatory perspective and business risk.
Most, if not all professional liability policies are underwritten on a “Claims Made” basis – meaning you are covered from the period you are insured.
Retroactive Data for Previous Works
With most policies being underwritten on a “Claims made” basis, we ensure that our clients previous work is covered under the ‘Retroactive Date’ agreed with the insurers who will cover all previous work and advice.
Typically, the Retroactive Date should be consistent with the date the business started trading to ensure you are correctly insured for any previous work carried out.