Review an accounting provider's professional liability insurance

Request current insurance evidence identifying the insured entity, insurer, policy period and relevant limits. Compare the named insured with the firm signing your engagement. An affiliate's certificate or a document for a former practice needs explanation before you treat it as evidence about the service you are buying.

Decide what information your company needs with its broker or legal adviser. A provider may be able to supply a certificate and relevant confirmation without disclosing its entire policy. Identify unresolved questions and request an appropriate response rather than assuming that a familiar insurer's name settles them.

AICPA Member Insurance Programs describes accountants' professional liability insurance as addressing claims of financial harm from professional services. That is different from a general statement that the firm is insured. Ask whether the actual service in your proposal falls within the policy's relevant definitions and whether a specialist subcontractor has separate coverage.

Keep professional liability distinct from cyber, crime and other risks. A policy may have exclusions or conditions affecting a particular event. Ask a qualified insurance professional to assess material gaps rather than interpreting a certificate as evidence that every possible loss has insurance behind it.

The AICPA insurance program describes its professional liability policies as claims-made coverage, with timing conditions for the event and claim. That description is program-specific. Ask about the actual provider's policy basis, relevant dates and continuity rather than assuming all policies operate identically.

If the engagement creates records used for years, discuss what happens when the provider changes insurer, retires or closes. The company needs to understand any agreed notification and continuity commitments. Have advisers evaluate those promises alongside the policy evidence and the engagement's liability provisions.

Ask whether the stated limit is per claim, aggregate or subject to other terms, and whether defense costs affect available amounts. Avoid comparing two headline limits without understanding their basis. A higher number does not establish that your potential claim would be covered or paid in full.

Consider the decisions and records the provider will handle, the authority it receives and the plausible consequences of a failure. Use those facts to discuss the required insurance with qualified advisers. Do not request an arbitrary limit because another vendor contract used it for an unrelated service.

Review any contractual limits, indemnities and claim-notification process separately. Insurance evidence does not rewrite the service agreement or establish a direct right to payment from the insurer. If the contract relies on a particular insurance commitment, put the accepted obligation in the agreement and identify who monitors it.

Record the documents inspected, dates, questions answered and material limitations. Revisit the evidence when the contracting entity, service or risk changes, and at an appropriate renewal point. A certificate saved years ago gives limited information about current coverage.

Ask whether the provider can notify the company of a material coverage change during the engagement, and document the accepted commitment without assuming the certificate itself requires notice.

Continue evaluating competence, controls and delivery independently. Insurance is one part of the purchasing decision; it cannot prove the accuracy of future work. If a problem occurs, preserve the facts and obtain advice on the appropriate notice and claim route without assuming the existence of a policy guarantees reimbursement.