It could be said that ATT professional indemnity insurance is every accountant’s best friend. Even if it were not compulsory it would still be essential as it protects you in case anything possible goes wrong while working with a client.
Being an accountant no matter whether you work in book-keeping, taxation or consultancy; your advice and work is extremely important to the people that you work for. What you do and say will really affect how the company is run and therefore you are partially responsible for how successful the business is. That is why professional indemnity insurance is mandatory for ATT members.
How Professional Indemnity Insurance Protects ATT Members
You may not think that anything could possibly go wrong when you are working for a client, but unfortunately it can! As uncommon as it may be, many accountants have still found themselves victim to a claim being made against them. Whether the mistake was their fault or not; the claim was still made and so they still had to prove whether or not they were innocent. Proving that can be expensive and for some it can really damage their finances and potentially put them out of business. That is why professional indemnity insurance is mandatory for ATT members. If anything goes wrong, your insurance will cover it.
So just what can go wrong? Well if you are working in consultancy for example, you would be responsible for telling the third party how to run their business. You could come up with a business plan that informs the company how to move ahead and earn more profits. If that business plan were to fail (which it could do as even the best laid plans can fail), then any financial losses that the company suffers would be blamed entirely on you. You would then be expected to pay back the losses and that could run into thousands and in extreme cases, millions of pounds!
If you work within the wages, salaries and national insurance sector and you lose documents and information regarding company employees then you could find yourself in serious trouble. Professional indemnity insurance will cover you in case of data/document loss.
Overall it is possible for a number of things to go wrong when you work for the ATT. That is why ATT professional indemnity insurance is compulsory. You cannot predict what will happen in business and as qualified as you may be, mistakes can still be made.