Should a chartered accountant buy professional indemnity insurance?

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Subscribe to enjoy similar stories. I am a newly qualified chartered accountant. I would like to start my own practice, which would focus on audit and advisory services. Would it make sense for me to buy professional indemnity insurance? How would it help? -Name withheld on request Professional indemnity insurance is meant for professionals like you.

The policy is meant to protect the professional from lawsuits due to professional negligence. Claims could come from clients or anyone who acted based on her advice or a published report. Such claims aim to recover financial damages suffered by the complainant.

During this litigation process, the professional incurs various costs. In case the court decides against the professional, then the damages awarded by the court would be an additional cost. Both these costs are payable under the policy.

Often, even if the case does not have merit, the professional still incurs litigation costs. This itself can cause huge financial strain on the professional. So, irrespective of the stage of the firm’s journey, it is recommended to maintain professional indemnity insurance.

You may consider starting with a small sum insured and gradually enhance it based on increase in client exposure. As a company, can I maintain two group health insurance and life insurance policies for my employees? Through one policy, I want to offer an equal sum assured to all employees. Thereafter, for the senior employees, I want to offer an additional sum assured. How would the claim process work in such cases? -Name withheld on request If you want to offer a differential sum assured to employees, you need not maintain two separate policies.