Most CPAs are self-proclaimed introverts who prefer managing books to be in the limelight. The idea of being sued may be the furthest thing from your mind, but it won’t be after reading the following professional indemnity claims scenarios.
Imagine working late one night to meet a deadline. You work hard, complete the project, and your client is happy; that is until he finds a mistake in one of your calculations.
It has happened to everyone: you accidentally misplace an important document. You look everywhere and finally realize that you accidentally tossed it in the trash while tidying up. Worse yet, you unintentionally delete several years’ worth of data.
Consider a client who frequently asks for investment advice because you have a track record of success. Now consider what might happen if your advice turns out to be wrong and he loses a substantial sum of money as a result.
The insurance firm Huntersure states that negligence is the most common claim against accountants. This catch-all term includes a plethora of common mistakes anyone could make. Personal indemnity insurance, or PII as it is called by professionals, can protect you from serious repercussions resulting from minor mistakes like the ones described above.