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Archive for the ‘accountants professional indemnity insurance’ Category

Consultants Professional Indemnity Insurance

Tuesday, February 14th, 2012

Professional Indemnity (PI) Insurance is an insurance cover designed to protect a business offering professional advice or services.

Traditionally this insurance has been taken out by professions such as Accountants, Architects,  Surveyors,  Engineers etc. However this now includes a wide range of people who also provide a service and are considered to be Professionals. This  includes IT Consultants, Business Advisors, Consultants, Marketing Consultants, Management Consultants, Recruitment Consultants, P R Consultants, Health and Safety Consultants, Training Consultants and many more.

PI Insurance also protects against claims for damage to your client’s business, which means any financial loss that they suffer as a result of:

  • Any negligent act, error or omission
  • Breach of Implied Statutory Terms under the Sale of Goods Act 1979 and Supply of Goods and Services Act1982
  • Unintentional Infringement of Intellectual Property Rights
  • Loss of Documents or Data entrusted to the insured
  • Unintentional defamation (libel & slander)
  • Unintentional breach of confidence, confidential duty or misuse of information.

Professional Indemnity will pay all reasonable costs incurred in the defence (i.e. legal fees) or settlement of such claims arising from the above.

Please note if you already hold PI and decide to change insurer at renewal you MUST ensure that the new policy has RETROACTIVE COVER built in to cover the work carried out in the past that was insured by your previous policy.

There are some other points you should be aware of, these can be seen within our full article here.

Accountants professional indemnity.

Wednesday, September 21st, 2011

Accountancy is one of the established traditional professions. Accountants are often members of a professional body such as the ICAEW, ACCA, ICAS or ICAI, but the industry is also made up of unqualified but highly experienced advisors such as former tax inspectors. Some of these professional bodies maintain rules for mandatory PI cover and also issue “Practising Certificates” without which member firms are unable to practice.

What do insurers look for?

  1. Size of practice – This is the one of the major rating factors when determining the premium to be charged. This is usually determined from the gross annual income and the number of fee earners.
  2. Qualifications and experience –If an accountant is not qualified then insurers will want to see a CV with at least 5 years relevant experience.
  3. Type of work – Insurers will be particularly interested in what type of work the proposer is doing.
  4. The Activities can be classified from a risk point of view as High Risk, Medium Risk, Low risk or variable risk.

High Risk

  • Audit, accountancy and company tax for quoted companies
  • Insolvencies, liquidations and receiverships
  • Mergers, acquisitions and disposals

Medium Risk

  • Audit, accountancy and company tax for clients other than quoted companies
  • Personal taxation

Low Risk

  • Booking Keeping and Payroll work.
    General insurance

Variable Risk

  • Financial Services -low to high risk depending on the nature of the advice given.
  • Management Consultancy- low to medium risk depending on the nature of the advice given.

Largest Fees – The Underwriters will be interested to if there is an over reliance on one client and will be particularly concerned if more than 50 % of the fee income is derived from one source.

Overseas exposure – If the practice deals with clients based overseas this can be a problem ,especially if the client is based in the USA or Canada.

Past Claims experience – If the past claims experience has been poor this is generally seen as a reflection of the quality of the practice’s work, staff, internal risk management and experience.

For further information, do not hesitate to contact us.

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