The most important insurances for auditors
It is important for auditors to carefully review the scope and terms of their insurance to ensure they are adequately protected against the potential risks they may face.
To protect against such claims, we typically recommend the following types of insurance to auditors.
Important commercial insurances for auditors are:
Professional liability insurance
This insurance provides protection against claims due to errors, negligence, or other breaches of duty in professional practice. It usually covers the costs of legal defense and damages.
General liability insurance
This insurance provides protection against claims arising from injuries or damages occurring outside of professional practice, such as property damage or bodily injury from accidents, etc.
Assets damage liability insurance
This insurance is specifically tailored to the needs of professional groups who provide services and offer professional advice. It covers financial losses arising from errors or negligence in the provision of these services.
The right business insurance protects auditors from these types of claims:
The most common and severe insurance claims raised against auditors can be diverse, but some of the most prominent ones are:
Error or negligence in the examination
This can occur when an auditor makes mistakes or overlooks important information during an examination, which can lead to financial damages for the client.
Breach of contractual obligations
Auditors have contracts with their clients that establish certain obligations and expectations. If these obligations are not fulfilled, claims for breach of contract may arise.
Violation of professional duties
Auditors have ethical and professional standards that they must adhere to. A breach of these standards may lead to legal claims.
Violation of laws and regulations
Auditors must comply with applicable laws and regulations. Violation of these can lead to claims from clients or government authorities.
Liability to third parties
Third parties relying on the audit reports or findings could make claims if they suffer damage from the actions or omissions of the auditor.