Great American Targets Professional Liability for Accountants

PRODUCT: Accountants professional liability

COMPANY: Great American Insurance Company. The Herbert H. Landy Insurance Agency is the exclusive national program manager.

BEST RATING: A+ (Superior)

AVAILABILITY: The program is available to all retail and wholesale insurance firms via a simple registration process with the Herbert H. Landy Insurance Agency.

FOCUS: During President Franklin Roosevelt’s New Deal in the 1930s, the U.S. tax code was well under 1,000 pages. Since then, the code has become increasingly complex: Today, federal tax rules span about 75,000 pages.

According to data from the Office of Management & Budget, the most recent publication of the official tax code contains more than 3.9 million words, which is a 112,000-word increase from 2010. In addition to the law itself, 20 volumes of regulations span 14,000 pages and more than 10 million words.

“The tax code is more complex than ever, and as a result, there’s more margin for error,” explains John Torvi, vice president, marketing and sales, Herbert H. Landy Insurance Agency. “More than half of the claims we receive against accounting professionals are related to tax preparation. This includes missed deadlines and, believe it or not, failure to use the right forms.”

To protect accounting professionals, as well as tax preparers, bookkeepers, CPAs and enrolled agents, Landy provides broad coverage and risk management assistance. Coverage features are not limited to large CPA firms—Landy’s use of the self-rating express application enables brokers to immediately determine coverage availability and price for a wide range of accounting professionals.

Today’s accountants put themselves at risk in several ways, including over-relying on software and technology, missing critical items during an audit and failing to detect fraud. In addition, one of the fastest-growing threats to accounting professionals who store data is privacy theft and data security.

“Professional liability has come into focus because accountants are susceptible to liability for even a simple mistake or miscalculation,” Torvi explains. “Anything from client engagements and how to store or exchange data can have accountants and their practice subjected to a lawsuit. But liability insurance can certainly help.”

UNDERWRITING: Coverage includes a broad definition of professional services, including investment adviser, personal fiduciary and pro bono services. Multiple deduction options and initial claim expense limits are available, as is broad network security coverage with limits up to $2 million.

The plan provides employment practices and third-party discrimination coverage by endorsement. Coverage addresses embezzlement, theft and unlawful use of funds. Generous supplementary coverage is built in, and registered rep and life insurance agent coverage is available.

The policy offers a free and confidential legal hotline and an exclusive risk management website with professional document templates, risk management information and webinars clients can use to earn free continuing education credits. Two-year policy options for locking in rates and resetting limits are available for qualified clients.

MINIMUM PREMIUM: $386.

TARGET: Accounting firms with revenues up to $20 million. The program is available for businesses ranging from startups to large firms, including CPAs, enrolled agents, tax preparers and bookkeepers. Coverage is available for firms of all sizes, with limits up to $5 million.

COVERAGE TERRITORY: Available in all U.S. states except Alaska and Louisiana.

CONTACT: John Torvi, vice president of marketing & sales; The Herbert H. Landy Insurance Agency; 75 Second Ave. Suite 410, Needham, MA 02494.

Ronimarie Acord is an IA contributor.