The 2022 Malpractice Insurance Buyers' Guide

October 5, 2022 9:00 AM

With risks on the rise and a hard market for professional liability insurance developing, it's more important than ever for accounting firms to review their coverage to make sure they can handle emerging areas of concern like cyber, COVID-19 relief programs, and more. Below are some of the leading insurance programs for accountants and some of their key provisions; for more on the current and new risks accountants face, and the state of the insurance market for firms, see our feature.

Accountants Professional Liability

Carrier: Philadelphia Indemnity Insurance Co.

Type of coverage: Claims made

Policy limits: Up to $5 million

Client profile: Typically firms with under 100 professionals and less than $5 million in annual revenue. 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, and for policies with Pro-Pak enhancement, $5,000 in coverage for services as nonprofit director or officer. Several complementary coverage lines: BOP, crime, D&O, EPLI, cyber/privacy, EBL.

Coverage of assurance & other services: No coverage restriction by nature of assurance service.

Contact: Bill Rooney
bill.rooney@phly.com
(610) 538-2199

Accountants Professional Liability Insurance

Carrier: Great American Insurance Co.

Type of coverage: Claims made with incident reporting features

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 nonaccountants, including services as a trustee, conservator or similar fiduciary capacity, software consulting and financial advising.

Coverage of assurance & other services: Insurance for technology consulting, personal financial planning and litigation support service is built into the main policy form. Cybercrime endorsement featuring broad coverage with separate limits.

Contact: Herbert H. Landy Insurance
joanmarie@landy.com
(781) 292-5407

AICPA Professional Liability Insurance Program

Carrier: Continental Casualty Co., one of the CNA member insurance companies (underwriter) and Aon Insurance Services (national program administrator)

Type of coverage: Claims made and reported

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.

Client profile: CPA Value Plan: Sole practitioners and smaller firms who practice lower-risk services

Premier Plan: Small and midsized firms

Regional Firm Plan: 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 (except in Tennessee); peer review rating of pass; longevity; use of engagement letters; claim-free experience; participation in the program's risk control training. Deductible reduction incentive for early mediation and use of engagement letters.

Covered acts: Broad definition of "professional services." Also available are prior acts coverage and extended claim reporting period options. Cyber, crime, employee
dishonesty, employment practices and management liability coverage also available. New endorsements available with separate limits to address risks CPA firms face including management liability, liability, employment practices liability and crime coverage.

Coverage of assurance & other services: Provides coverage for services performed in the practice of public accountancy, including assurance services.

Contact: Aon Insurance Services
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 & other services: Insurance provided for compilation, review and audit services, including SEC registrants.

Contact: CAMICO
San Mateo, Calif.
Gary Florian
inquiry@camico.com
(800) 652-1772

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, EAs, 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 and consulting, management advisory services, bookkeeping, trustee services, fiduciary services. Supplementary coverages for regulatory & disciplinary proceeding. Cyber liability, with first- and third-party privacy coverage. Coverage for registered representatives, life insurance agents and personal financial planning coverage, ransomware.

Coverage of assurance & other services: Audits, reviews, compilations and all tax work.

Contact: McGowan Program Administrators
Dogan Tuncel
dtuncel@mcgowanprograms.com
(866) 262-7542

Protexure Accountants Professional Liability

Carrier: ISMIE Mutual Insurance Co.

Type of coverage: Claims made

Policy limits: Up to $2,000,000/$4,000,000 per claim and in the aggregate

Client profile: Small to midsized 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. Cyber coverage available.

Coverage of assurance & other services: Broad-form definition of professional services.

Contact: Ryan Schwartz
schwartz@protexure.com
(630) 799-2000 ext. 7015

PT Pro Program

Carrier: Nationwide - National Casualty Co.

Type of coverage: Claims made and reported

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, Enrolled Agent or tax preparer, arbitrator or mediator, IT and network security consulting. Supplementary coverages for regulatory and disciplinary proceedings ,subpoena expenses and nonprofit D&O. Coverage for cyber liability offered through stand-alone insurance policies.

Coverage of assurance & other services: Provides coverage for audits, reviews and compilation work. Public audit and securities services fall outside the underwriting appetite.

Contact: RiskDesk
www.ptprocover.com
Jock Wols
jock.wols@ptprocover.com
(859) 327-5594

Target Professional Programs

Carrier: The Hartford – Twin City Fire Insurance

Type of coverage: Claims made

Policy limits: $100,000 to $3 million

Client profile: Small to midsized private accounting firms of 1-50 professionals including CPAs, public accountants, EAs, 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. New coverage enhancements include pre-claim expense coverage; spousal/domestic partner liability coverage; workplace violence coverage; not-for-profit D&O coverage; and deception fraud coverage.

Coverage of assurance & other services: Broad definition of professional services including advice or services rendered as a financial planner, consultant, trustee, receiver or executor.

Contact: Target Professional Programs
Lacy Podgers
lpodgers@targetproins.com
(331) 333- 8229

Travelers 1st Choice + Accountants Professional Liability

Carrier: Travelers Casualty and Surety Co. of America

Type of coverage: Accountants errors & omissions coverage

Policy limits: Up to $5 million per occurrence and in aggregate. Two-year policy terms are available for select small firms.

Client profile: Small firms with up to $500,000 in annual revenue; midsized firms with $500,000-$30,000,000 in annual revenue.

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, EA or tax preparer, arbitrator or mediator and more. Cyber liability insurance for accounting professionals also available.

Coverage of assurance & other services: As may be applicable as part of services provided in the practice of accounting.

Contact: Travelers
Josh Slater
jslater2@travelers.com