Members of the AAT have to have professional indemnity insurance in place as a mandatory requirement. For some professionals this might pose the question of where do I get it and how do I make sure it is affordable? Professional indemnity insurance comes in various different levels and can protect all sorts of circumstances. AAT professional indemnity can be professionally designed by the insurance company in question which can provide added peace of mind that the policy someone ends up with is suited to their needs.
AAT professional indemnity pays out in the event that the policyholder faces a legal claim that they have made a mistake in the conduct of their business. This might arise if a client feels that they have lost money because of the advice given to them by a professional.
A legal challenge will mean hiring legal help to defend a case, which can be time consuming and expensive. Professional indemnity will pay for someone’s legal bills, and even pay the cost of compensation should it be awarded against them, up to set limits.
The typical elements of an indemnity policy include protection if somebody is accused of breach of confidence or copyright, and protection if they are accused of making a mistake, omission, or even committing an act of negligence.
Indemnity insurance can be bought which covers a company and its various partners or employees, or which covers an individual. Broader policy elements will even protect the policyholder should the firm face a claim that an employee has acted dishonestly, and perhaps defrauded a client, for example.
Protection like this can also include other options, which may come as standard or need to be added on, perhaps for an extra fee. Some common additions include what is known as runoff cover, which is a period of extra protection which can be applied as a professional winds down a business, retires, or changes insurer. This can ensure that somebody is still protected in any vulnerable period where they are not trading but may still be liable for legal action.
There is also an element to this form of cover which is known as retroactive protection. This refers to an element which will provide cover for a legal claim which arrives in future but which actually dates back to an incident which occurred before the cover itself was actually bought. For this to be valid, a policyholder must not have had indication that a legal claim was imminent when they took out the cover.
AAT professional indemnity can be bought at a level which is appropriate to a business, and policies are typically tailored so they provide a level which is at least equal to the AAT requirements.
AAT professional indemnity is compulsory and extremely useful to all AAT members. Ensuring that you are protected financially in case a claim is made against you, professional indemnity insurance has helped thousands of accountants to right any mistakes or problems that have occurred.
What you need to remember is that even if the problem that occurs is not your fault, you could still be forced to pay out compensation to the third party. A number of things can go wrong and you do need to be aware of that when you start your career with AAT.
How Professional Indemnity Insurance Works
With AAT professional indemnity insurance, it covers you in the event of:
- Breach of Confidentiality
The above are just a few of the situations where indemnity insurance can help. Professional indemnity insurance helps to ensure that if a claim is made against you, no matter what the outcome of the claim you will still be protected by your insurance policy.
It could be that you have accidentally lost a third party’s documents and that in turn has caused them to lose money. You would be responsible for paying back that money as well as providing compensation for the inconvenience caused. Another mistake that you could make includes damaging the third party’s property. If you go onto the premises of the company and you accidentally break something, you would be faced with a claim against you.
Obviously as an accountant, it is unlikely that you are going to cause damages when you visit a third party’s premises. However, as unlikely as it may be, accidents do happen and you could end up causing an injury. That is why it is always better to be protected just in case the unlikely were to happen.
As mentioned, AAT professional indemnity cover is mandatory. The very nature of your job puts you and the third party at risk. The third party could lose money because of your advice and you could potentially be out of business if a claim was made against you and you didn’t have insurance.
Overall AAT professional indemnity is essential and it really can help you. Nobody likes to think about what could go wrong in business, but if you were to be hit with a claim against you without any insurance, you could find yourself ruined financially. So it is always better to be prepared and be protected rather than not think about what could happen and risk losing everything.
AAT professional indemnity is a compulsory insurance for all members of the Association of Accounting Technicians. It provides protection for both your statutory and contractual obligations.
And in many cases, even the self employed can benefit from the financial protection offered by this professional indemnity insurance (PII).
Have you ever considered whether your business survive if it was faced with a claim of carelessness against it, such as injury; negligence, loss of documents?
Just one such claim could hit your company financially quite hard, as well as undoubtedly put you under stress. But having the financial protection of professional indemnity insurance in place could help stop financial disaster.
So, where do you go if you want to buy AAT professional indemnity cover?
Finding the right AAT PII cover is easy when using a specialist provider of this niche insurance. Historically, specialist providers of professional indemnity products will have endless expertise in the sector, enabling them to provide a policy that best suits your company’s needs.
When buying the cover, do note, that there are various levels of cover often available, so it is important that you choose the right one to ensure you are adequately protected.
Plus, check out:
- what the policy excess will be in the event of a claim, if there is any;
- whether you can, in the future should you need to, arrange a “run-off” cover for a period of time after the business closes, in case a claim is made against it. The time between an incident happening and a claim being made can be quite a while;
- the policy conditions and benefits. These do vary among the various providers;
- any exclusions.
Finally, remember that to protect yourself and your livelihood does not have to be a time consuming exercise. A specialist provider of AAT professional indemnity cover can help you to find the right solution for your business.