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What Is Professional Indemnity Insurance for Auditors?
Professional indemnity insurance for auditors is also known as:
This policy can help cover claims of:
- Negligence
- Misrepresentation
- Inaccurate advice
- Violation of good faith and fair dealing
This means professional liability insurance is protecting your business in the event of a mistake. For example, let’s say your auditor doesn’t follow the right duty of care or auditing standards while providing financial services on a client’s case. They make a mistake that causes your client to sue you. Without this legal liability coverage, you’ll have to pay out of pocket for the claim, which can cause significant financial losses for your business.
To learn more about professional indemnity insurance for auditors, obtener una cotización from us today. We can also help you learn more about other important business insurance coverages, like general liability, commercial property or workers’ compensation insurance. We’re an insurance company you can trust. In fact, business owners have counted on us for over 200 years to get the right coverage.
What Are the Liabilities of an Auditor?
Auditors spend most of their time reviewing finances and evaluating numbers. But what happens if they make a mistake? Professional liability insurance covers you for scenarios like:
- Making a calculation error on an audit that causes a client to have to pay higher penalties. When your client finds out about the error, they sue your firm.
- Entering data wrong in a client’s audit reports, causing your client to face incorrect financial penalties. As a result, your client sues your firm.
- Misunderstanding the accounting standards at your firm and rounding data up when you shouldn’t have. This causes numbers to be skewed on financial statements and your client to have to pay a penalty. After your client realizes this happened, they file a claim against your business.
It’s also important to note that auditors are responsible for known users and foreseeable users of the financial statements they produce. So, if your client’s business uses the financial statements your auditor produces to try and get a loan from a bank, your auditor may be liable for that information.
You’ll also want to make sure that the auditors at your business practice due care. This is a legal term that refers to you and your team making an effort not to cause harm to your clients. It refers to the level of professional judgment, care, prudence and determination that your client’s would expect in the services you provide.1
What Types of Insurance Do Auditors Need?
While professional liability insurance can help protect your firm from claims of errors or omissions in your professional services, it doesn’t help cover claims of:
- Daños a la propiedad
- Lesiones corporales
- Advertising injuries
To get coverage for additional risks like these, you’ll want policies like:
- General liability insurance
- Workers' compensation insurance
- Commercial property insurance
- Cyber insurance
You can also bundle these coverages in a Business Owners’ Policy (BOP). These combine business property and liability insurance together. You can then add additional coverages, like your cyber liability insurance or workers’ comp policy. This option for coverage can help you save money and be easier to manage. To learn more, obtener una cotización hoy mismo.
What Is the Cost of Professional Indemnity Insurance for Auditors?
The cost of professional indemnity insurance for auditors are calculated on a claims-made basis and can vary. Some factors that influence the cost of your insurance include your business’:
- Lugar
- Monto deducible
- Tipo
- Coverage limit of indemnity insurance
- Number of employees
- Years in service
- Claims history
For instance, if you have a history of claims, you may pay more for coverage than a business without one. You’ll also pay more for coverage if you have a higher limit.
Get Insurance Quotes for Professional Indemnity Insurance for Auditors
The best way to find the right coverage for your small business is to get multiple insurance quotes from different companies. You can then compare them for the most competitive price. To get started, obtener una cotización from us today. We’re an insurance company you can trust and have helped business owners get the coverage they need at the right price for over 200 years.
We know that every business owner is unique. That’s why we offer great professional liability insurance coverage spanning many industries and professions, like:
- Professional liability insurance for consultants
- Accountants professional liability insurance
- Professional liability insurance for bookkeepers
- Notary professional liability insurance
Last Updated: October 27, 2022
1 CPA Journal, “Fiduciary Duty, Due Care and the Public Interest”
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