In the litigious filled society of today, as a freelancer, you are invariably at risk of being dragged into lawsuits over your services performed. It is mandatory that you get the right insurance cover for your accounting business. Management Accountants are faced with an increasing need to adapt quickly to legislature changes in tax, accounting & reporting standards and other financial happenings across the globe.

For instance, India’s outsourcing business segment was sent reeling into disbelief when one of its outsourcing giants Satyam Computer Services admitted to a mammoth accounting fraud. So was the case with General Electric, a Fortune 500 company & American International Group (AIG), accused of falsifying and misleading results in their financial statements.

In all the above cited cases, who are to take at least part of the blame for what eventually panned out? Of course the CEO's and Finance Directors took the brunt of blame but the Management Accountants themselves did not escape liability. So how can freelance management accountants safeguard their business assets against the financial consequences of negligence claims? A simple solution is to get Professional Indemnity Insurance.

Professional indemnity insurance provides cover for claims brought against the policy holder due to their professional negligence. A typical policy will cover compensation claims together with all reasonable costs relating to the defence of the claim such as legal fee's. Claims could arise from negligence, error's or omissions; infringement of intellectual property rights; loss of data or documents; libel slander or defamation; breach of confidence or confidentiality.

Even if the policy holder has done nothing wrong but a claim is made against them, a professional indemnity policy will stand by them, protect and pay legal costs in their defence.

To cite an example, an accountant had to prepare a client’s tax returns and submit them to the Inland Revenue for scrutiny. However, despite several requests by the accountant for client information , the client was uncooperative. As a result, the returns were submitted late and subsequently, penalties were obligatory. The client filed a claim of negligence against the accountant, seeking damages. Thankfully the accountant had professional indemnity insurance cover, which covered the legal costs required to defend his business and reputation.

Why jeopardize your business security for the sake of a few hundred pounds when you can subscribe for a professional indemnity premium and safeguard your interests and grow your client base?