There is even less than a month remaining for outsourced accountants to select a civil liability insurance for their professional operation – it is going to be a compulsory requirement as of July 1, reminded BTA Baltic Insurance Company AAS (BTA) Civil Liability Insurance product manager Raivis Štrauss.
Amendments to the Law on Accounting require that the professional operation of an outsourced accountant must have liability insurance as of July 1 this year. The minimum liability limit is 3000 euros. BTA Civil Liability Insurance product manager Raivis Štrauss emphasizes the importance of such a decision, suggesting that the policy should be selected thoroughly, with care, obtaining a meaningful insurance, which would be of real support in case of an insured event.
“As we have seen, those accounting service providers, who already have taken care of their professional liability insurance, have made an objective assessment of risks and potential losses, which may occur due to error. Therefore a common thing for accounting service providers is to obtain policies with a limit of EUR 500,000 and above. A smaller accounting service provider probably would not really require a cover that large, although, I would advise against choosing the minimum statutory requirement for risk cover, as it will be hardly of help when insured event occurs” says Raivis Štrauss.
BTA reminds to pay attention to the cover of risks included in the policy when selecting the most appropriate professional liability insurance policy.
“For accounting service providers, an essential risk is failure to manage to meet deadlines. For instance, failure to submit annual report in time can be both – compensated as well as a case not subject to compensation, as reasons for being late can vary. Also worth keeping in mind that the accountant, when obtaining policy, has options to adjust the insurance contract provisions in order to take care that the policy really served as a safety cushion, when in need,” adds Raivis Štrauss. He also reminds that an important thing to pay attention to is the list of exceptions and coming to agreement with the insurer on insurance protection that is most appropriate to one’s business peculiarities.
BTA data indicate that since the adoption of the amendments to the law last fall, the accountants’ interest in insurance keeps growing. Many customers, becoming aware that their assumption of policy being very expensive is wrong, and actually its price is affordable, obtain it even before the law has taken effect, and often the insurance contract terms exceed the minimum statutory insurance threshold. According to current BTA’s experience, insured events for the major part occur because of penalties imposed by the State Revenue Service. Losses have been compensated in more than 80% of cases, when third parties have incurred losses due to professional errors of accountants.
BTA Baltic Insurance Company AAS is a major insurance company in the Baltic States, providing the broadest range of non-life insurance services in Latvia, Lithuania and Estonia. The largest shareholder of BTA is Vienna Insurance Group AG with 190 year experience in the insurance field. one of the leading insurers in Europe. More than 50 companies in 25 countries constitute this group, it employs 24,000 employees and is a clear leader in its markets in Europe, having a high financial strength rating — Standard & Poor’s A+ (stable outlook), and listing on stock exchanges of Vienna and Prague.
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BTA Baltic Insurance Company AAS
Phone: +371 67025676, mobile: +371 26756841