Over the past few years, insurers have taken a proactive approach to preventing cybercrime, conducting automated network footprinting, at policy renewal and/or throughout the policy period. Doing this allows insurers to simplify the insurance application process, and to detect vulnerabilities and potential compromises.
As cryptocurrency trading has steadily increased since 2009, the last year has seen a surge in crypto investments, alongside an increase in underpaid tax from these investments. The trend poses a new issue for accountants, who will need to ensure cover is in place to protect themselves from possible claims.
When it comes to assessing your professional indemnity arrangements and selecting the right limit, consider there are several key factors to consider. These include your regulatory body, client base and any potential exposures your practice may face.
AI security software which seeks out threats before they can impact operations is not having the positive impact on cyber policies that companies perhaps expected. The cyber market continues to correct and evolve, and while security software may carry more weight in the future, currently insurers remain focused on ensuring policyholders have the basics of cybersecurity in place.
When it comes to renewing or taking out new professional indemnity insurance, it is important to understand the crucial role your gross fees play when insurers calculate your quotes, as it could cost you more if done incorrectly or save you cash when done right.
An update on the David McClean and others v Andrew Thornhill QC case concerning duties of care in tax avoidance schemes. This is an important read as it provides essential guidance on the circumstances in which a duty to warn clients will form part of a professional's obligations. A guest article by: Laura Stocks, Partner at RPC Tel: +44 (0)20 3060 6389 Email: laura.stocks@rpc.co.uk
Given that many firms have relied on home-working for almost two years, regulators and courts are now expecting accountants to formalise their risk management practices for remote workers.
On 21 December 2021 the Government launched a consultation into the future of insolvency regulation. The changes proposed in the consultation document will have a wide ranging impact on the insolvency profession (and its insurers) with the proposals including: the direct regulation of insolvency firms, the introduction of a single regulatory body with powers to order compensation against insolvency practitioners and firms, a new additional requirements regime, changes to the bond regime and a public register of insolvency practitioners and firms. Many of the changes proposed require primary legislation and so it may be some time before the changes take effect (if adopted). But there does appear to be some wind behind these proposals given they follow on from the Call for Evidence in 2019 and a more general focus on insolvency issues in the wake of the Covid-19 pandemic.
An engagement letter protects firms such as accountants, by providing a record of the contract between the accountant and their client i.e. entering in a contractual relationship. The use of engagement letters help minimise the risk of potential misunderstandings between both parties.
Although Professional Indemnity Insurance (PII) is not always required for accountants by law, it is one of the most important types of business liability insurance for firms to invest in. Accountants handle complex financial transactions and confidential data for clients, so any issue at work can have significant financial consequences for both the client and accountant if they are not protected by PII. A PII policy will cover the cost of any client claim – whether this be due to negligence or otherwise – as well as any compensatory damages that the firm is required to pay.
In this modern technological world, it comes as no surprise that professional firms, who typically hold significant amounts of client money and personal data, are subject to ever-increasing cyber-risk.
Most professional indemnity policies will include a retroactive date, which is the date from which you purchased uninterrupted professional indemnity cover or the date from which your insurer agreed to cover you.
