Professional Liability Insurance – FAQs

What is Professional Liability Insurance? 

Professional Liability Insurance (PLI) protects you or your business in the event that a client holds you responsible for a professional service or advice that they believe didn’t perform as promised.    

 

Why do I need it?

You and your clients need the protection.  You must be able to provide insurance on all public accounting and regulated services provided to the public. The largest number of claims received in tax services. New firms are required to submit proof of insurance through the New Firms PLI Declaration with their application before being authorized to offer services.  Existing firms must submit annually on September 30th.

Who needs it?

All members engaged in the practice of public accounting or regulated services.  Members are usually insured through the firm PLI policy.


What must be included?

The specific requirements are outlined in the CPA Nova Scotia PLI Policy and differ depending on how many CPAs are working in a practice.  More information can be found at cpans.ca/Firms/Professional Liability Insurance. The specific PLI coverage required by CPAs in Canada includes; defence cost coverage and claims costs. 

 

What is discovery period insurance, and why do I need it?

CPAs must maintain insurance for six years upon the termination of practice to cover services they rendered while in practice.

 

What to look for in various PLI insurers and quotes?

  • Reputable Insurance company with adequate underwriters.
  • Discovery period costs at a later date, as you will be required to pay it.
    • Ask if you may become eligible for free discovery insurance.
  • Details to ensure PLI requirements of CPA Nova Scotia are covered

 

What if my firm is a personal professional corporation that does not offer services to the public?

If your personal professional corporation does not offer services to the public, the PLI may be covered through the operating firm’s policy.  The operating firm is the only firm through which the member is providing services to the public.  It is up to the member to confirm if their personal professional corporation is insured through their operating firm. 

 

Where do I go to get insurance?

Several insurance companies offer PLI.  CPA Nova Scotia cannot provide recommendations or verify coverage from providers.  The CPA profession does own CPA Professional Liability Plan Inc. (formerly AICA Services Inc.), which is an option for all members. Its operation continues to be overseen by our peers in the CPA provincial bodies to ensure that it maintains compliant with provincial body requirements and maintains a high level of service for CPA members.


Where can I get more information on CPA Professional Liability Plan Inc.?

Visit the CPA Professional Liability Plan Inc. website for more information. The Professional Liability Plan Inc. includes the following coverage:

  • Deductible reduction if an engagement letter is used or a claim is successfully settled using an alternative method of going to court;
  • Coverage for traditional and non-traditional services including coverage for public company-related services;
  • Innocent partner coverage.