Although we live in a litigious age, it's never a good feeling waiting for a summons and complaint from a disgruntled client to be delivered to your door. And as the severity of claims against accountants has been on the rise, limits on professional liability policies have remained level, according to Ron Parisi, executive vice president for risk management at Camico. "The limits on E&O [professional liability] policies have been stagnant over the last five to 10 years, while the verdicts are getting higher," he observed. "I would urge CPAs to be mindful of the limits of liability on their insurance as verdicts and losses are tending higher."
Parisi cited the recent lawsuit brought by noted author Patricia Cornwell against Top 100 Firm Anchin, Block & Anchin, which resulted in an award of $50 million. "A lot comes down to documentation, both between the client and the CPA, and internally within the CPA firm," he said. "When there's a lack of documentation, it creates a vacuum that juries tend to fill in negatively."
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access