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Benefits under Professional Indemnity for Chartered Accountants

Posted on 29 August, 2022
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As a Chartered Accountant, you understand the importance of maintaining the highest professionalism in your work. Your clients trust you to provide accurate financial information and advice. They expect you to uphold excellent standards of integrity and competence.

However, even the most seasoned professionals can make errors. If you make a mistake in your work that causes financial loss or damage to your client, they may take legal action against you. Professional indemnity insurance (PII) is designed to protect you from the cost of defending yourself against such claims and any damages awarded against you.

Why Does a Chartered Accountant Need Professional Indemnity Insurance?

Benefits under Professional Indemnity for Chartered Accountants

Professional Indemnity Insurance can cover you for a wide range of potential risks, including:

  • Negligent advice

  • Breach of professional duty

  • Defamation

  • Malicious prosecution

Without Professional Indemnity Insurance, you would be personally liable for the cost of defending any claims made against you and any damages or compensation that may be awarded. It could quickly become very expensive and even force you to give up your business.

How Does Professional Indemnity Insurance for Chartered Accountants Function?

A few different types of Professional Indemnity Insurance policies are available, and the coverage can vary depending on the policy. Some policies will only cover damages awarded to the plaintiff, while others may also cover the costs of legal defence. It is prudent to read the policy carefully before purchasing.

Most Professional Indemnity Insurance policies limit the amount of coverage they provide. It is crucial to make sure that the policy limit is high enough to cover the potential costs of a lawsuit. Suppose the damages awarded to the plaintiff exceed the policy limit. In that case, the professional will be responsible for paying the remainder out of pocket.

Some professionals may also purchase an excess liability policy, which provides additional coverage above and beyond the limits of the Professional Indemnity policy. It can be important for professionals at a higher risk of being sued, such as those who work in high-risk industries.

If you are considering purchasing Professional Indemnity Insurance, it is essential to compare policies from different insurers to find the one that best meets your needs. It is also good to speak with a Professional Indemnity Insurance broker to advise on the best policy for your particular situation.

Of course, the claims have to be for your services provided during the policy period. However, some insurers have a provision for covering the damages caused by a service provided at a previous date.

What are the Benefits of Professional Indemnity for Chartered Accountants?

The Key Benefits of Professional Indemnity for Chartered Accountants are as follows:

1. Comprehensive Coverage

Professional Indemnity Insurance for Chartered Accountants help CAs protect themselves and their employees and businesses against third-party allegations of breach of contract, negligent act, wrong advice, errors, omissions, or breach of statute.

2. Legal Costs

Policyholders are typically responsible for their legal expenses in pursuing or defending a claim under a Professional Indemnity policy. However, some insurers will agree to pay or contribute towards policyholders’ legal costs in certain circumstances. It is usually based on conditions, such as the insurer’s approval of the policyholder’s choice of lawyer. It may be limited to a set amount. It is important to check the terms of your policy carefully to see if this cover is included and what the conditions are.

If you have cover for legal expenses, remember that you will still be liable for any excess on your policy. You should also be aware that the insurer may seek to recover its costs if you are unsuccessful in your claim.

Some policies also include cover for costs incurred in defending disciplinary proceedings brought against the policyholder. Again, this is subject to conditions and may be limited to a set amount.

3. Client’s Trust

All professionals know the importance of gaining your clients’ trust. After all, without trust, you wouldn’t have a business. However, the question that haunts your clients is, “what would happen if something goes wrong?”

When you disclose to your client that you have Professional Indemnity Insurance in place, you show them that you are prepared to repay them if things don’t go as planned. It instils a newfound faith towards you in your clients.

4. Increased Business Opportunities

Many businesses will only work with other companies with professional indemnity insurance in place. Having this type of insurance can open up new business opportunities.

5. Competitive Advantage

Chartered Accountants having Professional Indemnity Insurance have a competitive advantage over professionals or businesses that don’t.

To Conclude

When choosing Professional Indemnity Insurance for Chartered Accountants, there are a few key factors to consider. First, the size of your firm and the scope of your services will dictate the level of coverage you need.

Second, select a policy with a reputable insurer that offers both comprehensive coverage and competitive rates. It will be significantly beneficial to check out ICICI Lombard Professional Indemnity Insurance for Chartered Accountants, as they are one of the leading insurers in India.

And finally, don’t forget to review your policy regularly to ensure that it meets your changing needs. With these simple steps, you can be confident that you’re adequately protected against the financial risks associated with your profession.

  • Professional Indemnity for Chartered Accountants
  • Product Code: 4024
  • Product UIN: IRDAN115CP0024V01201920

Help us know you better!

This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). customersupport@iciclombard.com. www.icicilombard.com. (Workman Compensation, 4010 , IRDAN115P0010V01200607)