Insurance for a tax practice

We have probably all heard the quote: ‘To err is human; to forgive divine.’ As tax advisers the reality is that we are dealing with human beings not gods and increasingly another saying may be heard: ‘Where there’s blame there’s a claim.’ These can involve substantial sums and prudent advisers will make sure they have insurance to cover for unforeseen eventualities; but what types will be required?

Professional indemnity

The first type of insurance that will occur to the tax adviser is professional indemnity. Tax can involve large liabilities and the wrong advice can result in a client who is more than a little disappointed – they may have taken steps or incurred costs on the basis of that advice and will seek recompense if it was incorrect. Was a claim not made in time or was it not realised that a liability would arise in particular...