The profession of an accountant involves the risk of making errors, not only in maintaining financial records. Make a mistake in a claim submitted on behalf of a client or fail to present it on time. The financial consequences will fall on you—checkin which situations the insurance can take over this responsibility.

In this article, you will learn:

• Is professional liability insurance for the accounting office mandatory?
• What damages can an accountant insure against?
• In which situations is professional liability insurance beneficial for an     accountant?
• What else is worth knowing about professional liability insurance?

Does an accounting office need to be insured?

Insurance is divided into two categories - mandatory and optional. This means some policies must be purchased, while others can be chosen voluntarily.

If you work in accounting and must maintain financial records as a service, you must have professional liability insurance for your accounting office. You can extend it with selected add-ons - we will provide more information about them in the next part of the text.

Important! At Leadenhall, mandatory professional liability insurance for accountants complies with current Polish law regulations. It covers the maintenance of financial records for financial purposes with a limit of up to 10,000 euros per occurrence.

Mandatory insurance protects you and your employees against damages arising from the provision of accounting services. In this case, making an error can prove to be exceptionally costly.

What other damages can an accountant insure against?

The scope of coverage provided by the insurance depends on many factors, primarily the insurance company and the chosen policy variant.

Using the example of Leadenhall Insurance policy, we will present the available options within professional liability insurance for accountants. You have five sections to choose from:

• Section 1     covers the aforementioned mandatory insurance.
• Section 2     includes professional liability for maintaining records for tax and     accounting purposes, expanded to have insurance for defence costs and     criminal-fiscal proceedings, breach of confidentiality, defamation or     insult, liability within joint ventures, and loss of documents.
• Section 3     pertains to advisory services in social insurance and other     personnel-related advice.
• Section 4     covers insurance costs in the event of personal criminal-fiscal liability     of the insured.
• Section 5     encompasses liability insurance and administrative proceedings costs for     cyber damages and violations of the GDPR.

In which specific situations is the policy beneficial? Most common situations

Below, we present a list of the most frequently reported damages covered by professional liability insurance for accountants.

• Loss of     exemption from ZUS (Social Insurance Institution) contributions: The     insurance is helpful if, due to your delay in submitting an application or     making an error in calculating the contribution, the client loses the     possibility of exemption from social insurance contributions based on     crisis shields.
• Loss of     subsidies from PFRON (State Fund for Rehabilitation of the Disabled):     Similar to the above, if the client loses the opportunity to receive     subsidies from the State Fund for Rehabilitation of the Disabled due to     your negligence in timely applying.
• Failure     to report VAT obligations: The policy will cover the costs of interest and     other potential financial consequences for the client if, for example, the     accounting office fails to deliver the VAT registration declaration on     time after exceeding the sales value limit.
• Failure     in annual PIT declarations: The accounting office must cover the financial     losses incurred by spouses due to the necessity to file a correction to     the joint PIT declaration. In such a situation, they lose the opportunity     for joint settlement. The insurer can also assume responsibility for this.

Remember! If you doubt the policy will apply in a specific situation, contact an insurance agent to clarify it.

What else is worth knowing?

In conclusion, we have gathered the most essential information regarding the Leadenhall Insurance offer for accounting offices in one place.

• The sum insured for optional policies can reach up to 5 million PLN (which protects in case of costly damages exceeding the mandatory policy limit!).
• Insurance coverage begins on the first day of the insurance period upon premium payment.
• The insurance is valid 24 hours daily within the European Economic Area (EEA).    
• The insured party must verify the accuracy of the submitted statements before     entering into the insurance contract.
• The insured party must also notify the insurer of any reported claims within     14 days of receiving them.

Now you know what professional liability insurance provides for accountants. If you are interested in this offer, please contact us.

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