The 2021 Accountant's Malpractice Insurance Buyer's Guide

September 29, 2021 6:19 PM

The number of major accountants liability insurance program offerings included in this year's list is smaller than it has been in previous years.

Several companies were acquired by other companies, and what observers call a “hard market” is prompting other insurers to reduce their exposure in the market by not writing new policies. (For more on the current market and the liability risks accountants are facing, see our story.)

Camico reached an agreement with CPA Mutual to transfer CPA Mutual’s Accountants Professional Liability Insurance program to Camico, effective Jan. 1, 2021, as policies renew, while CPAGold was acquired by wholesaler Worldwide Facilities LLC.

(See the program listing as a table here.)

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 credit: 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
(800) 336-5422
johnt@landy.com

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 up to $2,000,000 aggregate. New endorsements available with separate limits.
Client profile: CPA Value Plan: 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. 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 credit: 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; use of engagement letters; claim-free experience; or participation in the program’s risk control training. Deductible reduction for early mediation and use of engagement letters.
Pre-claim assistance, subpoena assistance, regulatory inquiry assistance, and reimbursement for time away from office to attend a mediation, arbitration, court hearing or trials available.
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 & other services: Provides coverage for services performed in the practice of public accountancy, including assurance services.
Contact: Aon Insurance Services
(800) 221-3023
Alvin Fennell

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 credit: 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. Extended reporting and cyber endorsements available.
Coverage of assurance & other services: Insurance provided for compilation, review and audit services, including SEC registrants.
Contact: Camico

www.camico.com

(800) 652-1772

inquiry@camico.com

Gary Florian

CPAGold

Carrier: SCOR
Type of coverage: Claims made and reported
Policy limits: $100,000 to $5 million
Client profile: No size of firm restrictions but focuses upon solo practitioners to firms of up to 50 CPAs and well-run regional firms.
A.M. Best rating: A+ FSC XV
Criteria for premium credit: Best firm characteristics; loss-control course; use of ADR in engagement letters; engagement letters for non-attest assignments; early settlement of claims; free loss-control course grants up to 7.5% three-year premium credit and 12 NASBA approved CPE credits.
Covered acts: Full tort coverage (not limited to negligence coverage); comprehensive definition of professional services; full coverage for prior acts; sublimited network, privacy and electronic media liability; reputation protection; not-for-profit directorships; disciplinary proceedings; subpoena coverage; trustee services; IT and network security consulting including the sale of hardware and software; wealth management services include life agents, RIAs and registered representatives.
Coverage of assurance & other services: Built into main policy form with additional option for claims expenses outside the limit.
Contact: Worldwide Facilities LLC, an Amwins Co.
(201) 345-2459

wwwcpagold.com

randy.castillo@amwins.com

CPAOnePro Accountants Professional Liability

Carrier: Hanover Insurance Co.
Type of coverage: Claims made and reported
Policy limits: Up to $10 million
Client profile: No size of firm restrictions; CPA firms, Enrolled Agents, general accounting practices, tax preparers, bookkeepers.
A.M. Best rating: A XV
Criteria for premium credit: Loss control seminar and webinar attendance; engagement letter usage; ADR language; claims-free experience; peer review; longevity; association membership.
Covered acts: Broad definition of professional services including trustee services, fiduciary services, accounting and consulting. Supplementary coverages for regulatory and disciplinary proceedings. Cyber liability, with first- and third-party privacy coverage. Coverage for registered representatives, life insurance agents and full personal financial planning coverage. Ransomware $75,000.
Coverage of assurance & other services: Provides coverage for audits, reviews and compilation work. Also SEC attests and SOX engagements.
Contact: McGowan Program Administrators
(866) 262-7542

dtuncel@mcgowanprograms.com

Dogan Tuncel

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 credit: 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: 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
(331) 333- 8227

pfeltz@targetproins.com

Pam Feltz

Travelers 1st Choice+ Accountants Professional Liability

Carrier: Travelers Casualty and Surety Co. of America
Type of coverage: Accountants errors and 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 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 million 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 credit: Loss prevention/risk management policies and procedures such as the use of engagement letters; conflict-of-interest control system; 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

jslater2@travelers.com

Josh Slater