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Professional Liability for Accountants

As with any professional service, accountants face a number of liability claims for their clients. Although carrying CPA malpractice insurance is one way to address these potential concerns, knowing the common claims against accountants can give you an idea of areas to take additional action or precautions when dealing with clients.

Areas of negligence and fraud

Generally, the client does not feel the services rendered were consistent with what was agreed to at the initial meeting.

Errors in tax documentation

Even a tiny error from miscalculation or data entry can end up costing a client a lot of money, leaving the accountant responsible for the loss.

Even a tiny error from miscalculation or data entry can end up costing a client a lot of money, leaving the accountant responsible for the loss.

Miscalculation errors

While small monetary errors seem common, the resulting costs in legal defense, loss of client confidence and damage payouts can completely ruin your practice.

CPA malpractice insurance can help with the costs associated with client claims or lawsuits.

Failure to file appropriate forms

Forgetting to file an appropriate form can lead to serious legal consequences for either a client or your practice. This might result in additional fees or fines for either party.

Other common issues where accountants need additional protection are client claims of tax overpayments or legal defense for subpoena requirements. Check with your broker for a comprehensive professional liability policy addressing your risks.