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Why New CPAs Need Professional Liability Insurance

If you’re new to being a CPA, you may be wondering if Carmel professional liability insurance is worth the cost. After all, you’re just starting up and you want to keep overhead low. Liability insurance isn’t something you should skip. Here’s why.

What Is Professional Liability Insurance?

When you’re sued for something a client sees as a mistake, even if the claim is bogus, you’ll be responsible for paying some heavy legal fees to fight it. That’s where liability insurance comes in. If you have insurance, your legal costs and damages are covered up to the limits of your policy, so be sure you have enough provisions in place.

What Situations Does It Cover?

So, you triple check your work and don’t think you’ll need insurance? Any of the following situations can lead to you being sued for damages.

  • Tax mistakes – everyone makes mistakes eventually, no matter how careful they think they’re being. When that’s you, you’ll need to be covered.
  • Unfounded allegations – Sometimes a client is just unhappy with their financial situation and takes it out on you. Be prepared for unfounded claims by having insurance in place.
  • Unscrupulous employee – If you run a firm, you’re responsible for everything your employees do in your name. If one turns out to be a thief, you’ll be stuck with the legal bills.

As a new CPA, professional liability insurance is very important. This list should show you why you need to keep up with your policy.