McGowanPRO Professional Liability Blog / Resources / Articles

North American Professional Liability Insurance Agency, LLC (NAPLIA) is pleased to announce an exclusive Errors and Omissions insurance program designed specifically for accounting and consulting firms called CPA ProSecure.

CPA ProSecure is underwritten by The Rockhill Insurance Group a wholly owned subsidiary of the State Auto Group, rated A-Excellent by A. M. Best. State Auto Group. Founded in 1921, it is one of only 59 companies to have an A.M. Best rating of “A” for 75 years. State Auto has provided 96 consecutive quarters of dividends.

NAPLIA insures 1000’s of accounting firms in all 50 states. John Raspante, CPA, MST, CDFA heads up our Risk Management team, and Ralph Picardi our Hot-line Attorney/CPA heads up our legal team. Both regularly assist all clients in best practices, claims mitigation and engagement letters as well as website reviews.

“We sat down last year and created a wish list of the important features we wanted to enhance in our professional liability program. We used this as the foundation for CPA ProSecure. We chose Rockhill Insurance because they embraced our vision and supported our desire to provide a more comprehensive program.” – Stephen Vono, CFO/Principal

NAPLIA offers “more than just a policy” See our website for additional resources: 
http://www.CPAProSecure.com

What you don't know about intellectual property could be hurting the value of your business. Believe it or not, your IP is your most valuable business asset. So what are you doing to protect it?

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In some cases, it may appear that certain professional insurance policies overlap, or are intended to cover the same things.

Does my Errors & Omissions policy cover my acts as a Director?

What is the difference between professional liability and general liability?

Our Insurance Matrix provides a simple overview of some common professional liability policies and their intended coverage.

For more information simply contact us.

If you act as, or provide services as, a trustee it is important to understand your potential liability and relevant insurance coverage available to you.  Some Professional Liability policies include coverage for services as a trustee.  However, how these services are provided may influence such coverage.  Some questions you should consider?

1. How are your trustee services invoiced?  By your firm? or, by you individually?  If the latter, you should discuss with your agent.
2. Are there exclusions in your policy that may impact coverage for your trustee services?  Are you a beneficiary of the trust?

The question is often raised, what constitutes a “reportable incident” to my insurance carrier?  To answer this one should review the specific language in your professional liability (aka. errors & omissions) policy. 

Each insurance policy is different.  Only your specific policy can provide you with the conditions, definitions, and provisions relevant to your scenario.  The policy wording used here is for illustrative purposes only.

Your professional liability policy is a legal contract between you and your insurance carrier.  As such, it is essential to pay close attention to your policy definitions and conditions, and follow them closely.  Failure to follow the conditions of your specific policy could result in a denial of a claim.

Most professional liability policies have wording relevant to the reporting of a potential claim.

If, during the policy period, you become aware of a wrongful act or any facts or other circumstance that occurred on or after the retroactive date but prior to the end of the policy period which may reasonably be expected to subsequently give rise to a claim or regulatory proceeding against you, you must give  us written notice as soon as practicable of the  potential claim or  regulatory proceeding, but in any event not later than the end of the policy period or any extended reporting period, if applicable.

The wording here that is open to interpretation is “reasonably be expected”.  In general, courts will go by the “reasonable professional” rule to determine if other professionals in your situation would have acted similarly. 

When in question, contact your agent and/or carrier hotline to discuss the scenario for a second opinion.  The concern is, if a claim arises out of a situation that you were previously aware of and did not report, the carrier can potentially deny the claim for “prior knowledge”. 

The key date for determination is the expiration of your policy.  If you are aware of a potential claim, you want to make sure to report that incident prior to the expiration and renewal of your policy. 

How you report a potential incident is also very important.  Providing a vague statement to the carrier or your agent is typically not sufficient to be considered adequate reporting .  Again, read your policy on the specifics for reporting a potential incident.

Such written notice to us shall include:

1      Reasons for your decision to report this as a potential Claim; and

2      Details with dates of the alleged Covered Act; and

3      Potential amount of injuries or Damages arising from the Covered Act; and

4      The names of potential claimants; and

5      The manner in which you first became aware of the specific Covered Act.

When reporting a potential incident you should follow the specific conditions of your policy and provide all requested information, in the requested format, and reported to the appropriate contact.

This does not imply that every potential issue you face needs to be reported to your insurance carrier.  However, should a scenario arise you should discuss with your agent and ask yourself:

-          Is this directly related to the professional services covered under my policy?

-          Do I reasonably expect this to arise into a claim?

-          When does our professional liability policy come up for renewal?

And, then if reporting the incident:

-          Have I provided all of the details requested in my policy and reported in the appropriate manner?

You may also consider that some professional liability policies contain incentives in the form of deductible reduction for the early reporting and settlement of claims.  Review your policy to understand these features.

Your professional liability policy is intended to protect your practice from errors and omissions in the delivery of your professional services.  Do not miss out on the protection you purchased for failure to understand and follow the conditions of your policy.

If you receive a subpoena or summons related to a potential incident, read our White Paper on: Responding to Subpoenas & Summonses: An Accountants Guide to Understanding & Response.

NAPLIA is pleased to introduce our newest White Paper:

Responding to Subpoenas and Summonses: An Accountants Guide for Understanding & Response

A claim of malpractice is not the only exposure faced by accounting firms.  The nature of accounting services creates several scenarios where accounting firms are consistently engaged with the judicial system because of the lawsuits and investigations that confront their clients.

The intent of this White Paper is to:

• Distinguish between "simple" and "complex" subpoenas.
• Provide a framework to understand the subpoena process and create an appropriate internal process for response.
• Identify "Complicating Factors" that may impact the response process.
• Understand when to retain counsel, and when a subpoena is likely to evolve into a claim.

Download NAPLIA's White Paper on Responding to Subpoenas and Summonses Now.

Congratulations to long-time NAPLIA friend, Rita Keller, for being named to Accounting Today's 100 Most Influential People.

Rita Keller and NAPLIA Partner, Stephen Vono

Rita is a Social Media maven who brings her high energy and fresh ideas to CPA Firm Management.  She is a well respected speaker across industry conferences and we recommend keeping up with her through her blog and/or facebook page.

We commend Rita on her ideas of challenging the status-quo and bringing fresh insight to CPA Firm Management.

More from Rita:

Do your professionals know what to do when a client is unhappy?

We hate to take space to blow our own horn, but we at NAPLIA are extremely proud to be recognized for the fourth consecutive year as one of the fastest growing private companies in America.

http://www.naplia.com/Naplia/inc500.html

What does this mean for you?

You can be confident that you are working with a nationally recognized company that has been successful through our dedication and service to our clients.  We like to think we are changing the way professionals buy insurance.

NAPLIA is committed to providing you with a better buying experience for your Professional Insurance by:

• Providing Choice
• Providing Education & Resources
• Providing Experience & Expertise
• Providing Quality Service

Backed by a track record of success and national recognition.  We can confidently say that "no national agent can match our personal service, and no local agent can match our national recognition".

Contact us today for more information about your professional liability insurance, errors & omissions, or other professional insurance needs!