The 2023 Accountants Malpractice Liability Insurance Buyer's Guide

October 6, 2023 9:00 AM

As accountants come out of a "hard market" for professional liability insurance while continuing to face a wide range of old and emerging risks, having a solid insurance policy — or set of policies — is more important than ever. This year's Malpractice Liability Insurance Buyer's Guide looks at nine of the leading programs for accountants and what they're offering in the way of protection.

(For more on trends in insurance claims against accountants, see our feature story.)

One hand stopping dominoes falling -- risk concept

Accountants Professional Liability

Carrier: Philadelphia Indemnity Insurance Co.
Type of coverage: Claims made. Several complementary coverage lines: BOP, crime, D&O, EPLI, cyber/privacy, EBL.
Policy limits: Up to $5 million
Client profile: Typically firms with under 100 professionals and less than $5 million annual revenue providing traditional accounting and tax services. Superior larger firms are considered.
A.M. Best rating: A++
Criteria for premium credits: Client engagement letters; greater than three years in practice; emphasis on tax, bookkeeping, compilation; infrequent fee disputes; written client screening procedures; CPE; unqualified peer review; loss control seminar; and claims-free.
Covered acts: Broadly defined professional services subject to policy wording. Includes tax, compilation/write-up, reviewed statements, audits, management advisory services, basic financial planning, and witness/litigation support for financial matters, trustee, receiver and executor, notary, personal fiduciary, consulting in the course of practice of accountancy, for policies with Pro-Pak enhancement, $5,000 in coverage for services as nonprofit director or officer.
Coverage of assurance services: No coverage restriction by nature of assurance service.
Contact:
Bill Rooney
(610) 538-2199

bill.rooney@phly.com

Accountants Professional Liability Insurance

Carrier: Great American Insurance Co.
Type of coverage: Claims made with incident reporting features. Cybercrime endorsement featuring broad coverage with separate limits. Cyber coverage, employment practices and life insurance available as optional coverages.
Policy limits: $100,000 to $5 million. Higher limits may be available.
Client profile: Available for all sizes and areas of practice. Eligible firms may also choose $0 deductible and two-year policy options.
A.M. Best rating: A+
Criteria for premium credits: Loss-prevention seminars for premium credits; loss experience; risk characteristics of the firm. Free and confidential legal hotline; pre-claims service and exclusive risk management website.
Covered acts: Professional services performed or advice given in practice of accounting, and services performed within the accountant-client relationship even if they can be performed by non-accountants, including services as a trustee, conservator or similar fiduciary capacity, software consulting and financial advising.
Coverage of assurance services: Insurance for technology consulting, personal financial planning and litigation support service is built into the main policy form.
Contact:

joanmarie@landy.com

(781) 292-5407

AICPA Professional Liability Insurance Program

Carrier: Continental Casualty Co. (underwriter) and Aon Insurance Services (national program administrator)
Type of coverage: Claims made and reported professional liability insurance. Cyber, crime, employee dishonesty, employment practices and management liability coverage also available.
Policy limits: $100,000 to $10 million for qualified and eligible firms; split limits and separate defense limits available. Per claim and aggregate deductibles starting at $0 available for qualified and eligible firms. Separate cyber liability limits available for privacy event expense, network damage claim expense, business interruption, regulatory fines and penalties, and extortion coverage up to $2,000,000 aggregate. New endorsements available with separate limits to address the risks CPA firms face today including management liability, liability, employment practices liability and crime coverage.
Client profile: CPA Value Plan: Designed for sole practitioners and smaller firms who practice lower risk services. Online purchase available for new applicants and renewals. Premier Plan: Small and midsized firms. Coverage may be customized for unique firm needs. Regional Firm Plan: Broad coverage available for larger firms up to and including the AICPA's Major Firms Group and Group of 400.
A.M. Best rating: A
Criteria for premium credits: Membership in AICPA Governmental or Employee Benefit Audit Quality Centers; membership in PCPS section of the AICPA (not available in Tennessee); peer review rating of pass; longevity as program member; use of engagement letters; claim-free experience; or participation in the program's risk control training.
Supplementary benefits include: pre-claim assistance; subpoena assistance; regulatory inquiry assistance; and reimbursement for time away from office to attend a mediation, arbitration, court hearing or trials. Risk management incentives include deductible reduction for early mediation, and for use of engagement letters
Covered acts: Claims that are first made and reported in writing during the policy period by reason of an act or omission in the performance of professional services. Broad definition of "professional services." Also available are prior acts coverage and extended claim reporting period options.
Coverage of assurance services: Provides coverage for services performed in the practice of public accountancy, including assurance services.
Contact:
Alvin Fennell
(800) 221-3023

CAMICO

Carrier:
1. Great Divide Insurance Co. (W. R. Berkley)
2. CAMICO Mutual Insurance Co.
Type of coverage: Claims made and reported.
Policy limits: $100,000 to $15 million (higher limits may be available).
Client profile: All sizes of CPA firms that practice and adhere to sound professional standards.
A.M. Best rating:
1. A+
2. B++
Criteria for premium credits: Comprehensive risk management services at no additional charge. No-cost CPE earned from CAMICO loss-prevention seminars and online programs; deductible credits for alternative dispute resolution and early claims reporting; loss-prevention orientation credit.
Covered acts: Broad definition of professional services, including tax, accounting/bookkeeping, specific investment advice, management consulting, attest services, valuation, financial services, litigation support, and trustee/executor services. Special extended reporting program for sole proprietors and two-professional firms. Prior acts coverage available, and regulatory and/or disciplinary proceedings included. Cyber endorsement available.
Coverage of assurance services: Insurance provided for compilation, review and audit services, including SEC registrants.
Contact:

www.camico.com

Protexure Accountants Professional Liability

Carrier: ISMIE Mutual Insurance Co.
Type of coverage: Claims made. Cyber coverage available.
Policy limits: Up to $2,000,000/$4,000,000 per claim and in the aggregate.
Client profile: Small to midsized accounting firms with gross billings less than $4 million.
A.M. Best rating: A-
Criteria for premium credits: Quality control procedures; claim experience; area of practice concentration
Covered acts: Broad form definition of professional services. Prior acts provided to qualified firms.
Coverage of assurance services: Broad form definition of professional services
Contact:
Ryan Schwartz
rschwartz@protexure.com
(630) 799-2000 ext. 7015

CPAOnePro Accountants Professional Liability

Carrier: Hanover Insurance Co.
Type of coverage: Claims made and reported
Policy limits: Up to $10 million; Claim expenses in addition and first dollar defense are available.
Client profile: No size of firm restrictions; CPA firms, Enrolled agents, general accounting practices, tax preparers, bookkeepers, accounting consultants.
A.M. Best rating: A XV
Criteria for premium credits: Loss control seminar and webinar attendance; engagement letter usage; ADR language, claims-free experience; peer review; longevity; and association membership.
Covered acts: Broad definition of professional services including: Accounting & consulting, management advisory services, bookkeeping, trustee services, fiduciary services. Supplementary coverages for regulatory & disciplinary proceedings. Cyber-liability, with first- and third-party privacy coverage.
Coverage of assurance services: Coverage for assurance services, audits, reviews, compilation and all tax work.
Contact:
Dogan Tuncel

dtuncel@mcgowanprograms.com

(866) 262-7542

PT Pro Program

Carrier: Nationwide — National Casualty Co.
Type of coverage: Claims made and reported professional liability insurance
Policy limits: $250,000 to $1,000,000
Client profile: Solo accountants, bookkeepers and tax professionals primarily practicing in a part-time capacity.
A.M. Best rating: A+
Criteria for premium credits: Use of engagement letters; loss experience; experience; diary/calendaring system.
Covered acts: Definition of professional services includes those as an accountant or accounting consultant, bookkeeper, EA or tax preparer, arbitrator or mediator, IT and network security consulting. Supplementary coverages for regulatory and disciplinary proceedings,subpoena expenses and non-profit D&O.
Coverage of assurance services: Provides coverage for audits, reviews and compilation work. Public audit and securities services fall outside the underwriting appetite.Coverage for cyber liability offered through separate, standalone market-leading insurance policies.
Contact:
Jock Wols

jock.wols@ptprocover.com

(859) 327-5594

www.ptprocover.com

Target Professional Programs

Carrier: The Hartford — Twin City Fire Insurance
Type of coverage: Claims made. New coverage enhancements include: pre-claim expense coverage; spousal/domestic partner liability coverage, workplace violence coverage, not-for-profit D&O coverage & deception fraud coverage.
Policy limits: $100,000 to $3 million
Client profile: Small to midsized private accounting firms of 1-50 professionals including CPAs, public accountants, Enrolled Agents, tax preparers and bookkeepers.
A.M. Best rating: A+XV
Criteria for premium credits: Loss-control program, including use of engagement letters; claims-free experience; peer review; business experience.
Covered acts: Actual or alleged negligent acts, errors or omissions arising from performance of professional services for others. Coverage includes innocent insureds, prior acts coverage and extended reporting periods.
Coverage of assurance services: Broad definition of professional services including advice or services rendered as a financial planner, consultant, trustee, receiver or executor.
Contact:
Lacy Podgers

lpodgers@targetproins.com

(331) 333- 8229

Travelers 1st Choice + Accountants Professional Liability

Carrier: Travelers Casualty and Surety Company of America
Type of coverage: Accountants errors and omissions coverage. Cyber liability insurance for accounting professionals also available.
Policy limits: Up to $5 million per occurrence and in aggregate. Two-year policy terms are available for select small firms.
Client profile: Small accounting firms with annual revenues up to $500,000 that provide mainly bookkeeping, tax preparer and Enrolled Agent services; midsized accounting firms with annual revenues over $500,000 up to $30,000,000 that may also provide these services as well as more complex services such as audit, business valuations and projections, and fiduciary services.
A.M. Best rating: A++
Criteria for premium credits: Loss prevention/risk management policies and procedures such as the use of engagement letters; a conflict of interest control system and a client intake/screening procedure; favorable claim experience; longevity.
Covered acts: Broad range of professional services including: accountant or accounting consultant, bookkeeper, Enrolled Agent or tax preparer, arbitrator or mediator and more.
Coverage of assurance services: As may be applicable as part of services provided in the practice of accounting.
Contact:
Josh Slater

jslater2@travelers.com