Professional
Liability Insurance

Here are a few terms to be aware of when considering insurance:

Claims-made and reported policy: A claims-made and reported policy means the coverage is limited to only those claims that are first made against you while your policy is in force and reported to the company within your policy’s reporting provisions. Typically, the reporting period coincides with the period your policy is in force and for a time certain, often 60 days, after the policy expires. When purchased, an extended reporting period endorsement, often referred to as “tail” coverage, broadens the time period that claims may be made and reported against your policy.

The Retroactive Date, stated in the policy’s declarations, is the earliest date from which the policy provides coverage for professional services, sometimes referred to as “prior acts coverage.” Claims arising from acts, errors or omissions that occurred prior to the policy’s retroactive date (or the “prior acts date”) are not covered by the policy.

Limit of liability: The limit of liability reflects the claims limits of the coverage. Insurance carriers, as well as state requirements, determine the options for limits of liability. Various options are available, and the common types of options generally offered include:

• Per-claim: The maximum amount of liability protection an insurer will pay for any one claim.
• Aggregate: A professional liability policy issued with an aggregate limit reflects the maximum amount of liability insurance coverage available for all claims during the policy term. Each defense and indemnity payment that is made reduces the aggregate limit of liability.
• Split limit: All policies have a per-claim limit and an aggregate limit. With a split limit policy, the aggregate limit generally is two or three times the per-claim limit. The per-claim limit caps the amount available for each individual claim. The aggregate is the most that will be paid for the entire policy term. 

For example: a split limit policy of $1 million per claim and $2 million in the aggregate means the firm could have a maximum of four $500,000 claims or two $1 million claims during the policy term. 

• Separate limit of defense: Coverage in which this expense limit is a separate and distinct limit from the liability policy limit. For example, a policy might have a $200,000 separate defense limit and split limit of $1 million / $2 million. In cases where this option is offered, once the separate defense limit is exhausted, defense expenses will then be paid out of the liability policy limit.
• Expense outside of the limit: Some states require insurers to offer optional defense (or expense) coverage, stated on the declaration page, whereby the expense limit is outside the policy limit. This is particularly true for policies with low limits of liability. This type of policy provides no cap on the amount of money paid to defend a firm. Therefore, the only kind of payment that applies to the policy limit is an indemnity payment.

Examples of how costs affect limits

The following table shows examples of policy limits, costs of a claim, and remaining limits available for subsequent claims after indemnity and defense costs shown are paid. Note that the claims amounts paid are limited by both the per-claim amount and the policy aggregate amount.

‘Per claim deductible’ and ‘aggregate deductible’: The deductible is the portion of the covered loss that is paid by the policyholder. The policy will clarify whether the deductible amount paid reduces the limit of liability, or if the limit of liability is in excess of the deductible amount. 

The deductible options most frequently found include:

• Per-claim deductible: The per-claim deductible is applied to each claim made during the policy period and applies to the first money paid on the claim. 
• Aggregate deductible: The aggregate deductible is used with the per-claim deductible to put a cap on the total deductible amount paid out by the CPA firm during the policy term. For example, if the firm has a $5,000 per-claim deductible with a $10,000 aggregate deductible, the firm would pay the full deductible on the first two claims. Thereafter, the firm would not be assessed a deductible for any further claims during the policy term. Thus, the aggregate deductible defines the CPA firm’s maximum exposure for deductibles during the policy term.

Every carrier has a claims management philosophy, whether it is in a written statement or not. Ask the attorneys, who work as defense counsel for CPA professional liability carriers, for their assessments of the carrier’s claims handling process and philosophy. Most insurers make sound choices in selecting legal counsel and devising defense strategies, although some carriers may have more expertise in defending lawyers, doctors and design professionals than they do in defending CPAs—and the disciplines are very different from each other. The insurer should have skilled claims representatives on staff willing to work closely with the CPA firm and legal counsel in defending the claim.

The CAMICO’s Professional Liability Insurance (PLI) policy is a ‘claims made and reported’ policy. The insurance applies only to claims that are first made and reported to CAMICO during the policy period, or that are first made and reported to the company during an ‘extended reporting coverage’ period, if purchased. A defined grace period follows the expiration of a policy period. After the grace period, limited coverage ($100,000 sub-limit, in excess of the per claim deductible, or 50% of the per claim limit of liability, whichever is less) is provided for claims not reported within the policy period or grace period but are reported during the immediately succeeding policy period, and the insured has continuously maintained the policy during that 12-month period.

CAMICO’s continuity of coverage for potential claims provides protection and helps eliminate coverage gaps for potential claims known to an insured while coverage is consecutively renewed with the CAMICO program. This feature maintains coverage for potential claims that were not timely reported by policyholders who continuously renew their policies with the CAMICO program.

The CAMICO Mutual policy provides that the per-claim limit of liability shall apply in excess of the per-claim deductible. This provides the full limit above your deductible, versus being reduced by the deductible. That way, you have more protection toward liability for damages and any applicable defense costs arising out of a claim; the per-claim limit of liability is effectively larger. Most professional liability policies contain some form of deductible or self-insured retention.

Learn more about other CAMICO PLI features and benefits here. Or call us at 800.652.1772 and request to speak with an Account Executive.

CAMICO’s policy, which is a ‘claims made and reported’ policy, applies only to claims that are first made during the policy period and reported timely according to policy’s reporting requirements. Therefore, claims received after a CPA firm discontinues its policy would not be covered unless Extended Reporting Coverage (ERC), or ‘tail’ coverage, is in place to cover claims and the act or error occurred during the policy period and after the retroactive date. This is the same with most if not all our competitors. CPAs who are retiring or become permanently disabled, or who cancel or non-renew a policy for other reasons, are generally interested in purchasing ERC. CAMICO’s policy extends the right to purchase ERC to policyholders under specific terms. ERC can also be used in certain firm merger and dissolution situations, depending on the circumstances. 

There are many reasons why CPAs switch to CAMICO for their insurance needs. Here are five reasons why many CPAs choose CAMICO.

1. Created by CPAs, for CPAs: As a company formed and run by CPAs, CAMICO concentrates on insurance products and services for CPA firms only. The CPA focus means that we monitor and stay closely in step with changes in the accounting profession to provide timely risk management communications to policyholders on significant matters that pose potential liability exposures.
2. We only work with CPAs: Unlike many other carriers, CAMICO insures CPAs only and does not insure other professionals. Everyone at CAMICO only works with, and for CPAs. This is a big benefit because as a policyholder, you consult directly with in-house specialists and experts some of whom are also CPAs. It is very likely, that any situation you encounter will be one that our loss prevention and/or claims team has seen before and therefore, are in a position to respond, advise and guide you.
3. Superior Service: Nothing is more important to us than supporting the needs of our policyholders. We call it ‘The CAMICO Experience’, a personalized approach to taking care of you.  Don’t take our word for it – check out testimonials from some of our policyholders.
4. Stability: Since opening our company in 1986, our goal has always been to protect the profession over the long term and provide a stable insurance program of choice for all CPAs. We offer stability of coverage. We have proudly been protecting the profession for 37 continuous years.
5. Free, unlimited education, advice and resources: Policyholders with professional liability insurance have access to advice hotlines, education opportunities, practice management resources, a robust Members-Only Site and much more. For example, all of the CPAs at your firm have access to free CPE (approximately 20 free CPE credits per year). Consider the savings to your firm and staff.

Yes we do. In addition to CPA Professional Liability Insurance, CAMICO offers Employment Practices Liability, and Cyber insurance, and will place your Business Owners Package, Workers Compensation insurance and select Cyber liability policies through our wholly owned agency. As a company singularly focused on CPAs, our products and services are designed to deliver the expertise, support and solutions necessary to protect CPA firms. If you are interested to learn more, contact the team at CAMICO and we can help you select the right coverage options to meet the needs of your firm, thus helping to eliminate any gaps in your firm’s liability protection. 

Our Claims department’s strategy toward claims handling includes a proactive approach and a strong emphasis on risk management. You work directly with experienced in-house claims specialists who only handle accountants’ professional liability claims. Our claims handling philosophy includes:

• Solve professional liability problems fairly, efficiently and expeditiously with superior services and a personal approach.
• Encourage early notification of situations that could give rise to a claim. We even provide incentives to encourage early reporting of a problem.
• Provide a proactive defense—not passive and reactionary. Upfront analysis enables the development and implementation of a plan to resolve the matter in a focused manner.
• Employ a team approach that brings together the policyholder, the CAMICO representative and external attorneys and consultants, as required.
• Assist with potential claim matters on your behalf and at our own expense. Potential claim expenses such as attorneys’ fees are not charged against the deductible or policy limit
• Counsel policyholders on ways to avoid or minimize exposure.

Learn more about our claims guidance here 

If you have a circumstance that your firm would like to report, please complete the Claims Intake Form here. A CAMICO representative will contact you within 1-2 business days. If it is an urgent matter, please call CAMICO at 800.652.1772 / 650.378.6800 and request to speak with a Claims representative.

The CAMICO Mutual policy provides that expenses we incur on your behalf are not chargeable against the claim deductible or against the applicable limit of liability. The limit and deductible are not triggered until an actual claim is made. This in effect expands the coverage provided to policyholders for potential claims.

Policyholders should not take such actions without first receiving guidance from a risk adviser with the insurance company, or without the prior written consent of the company. Such actions will likely violate policy conditions, which may result in a denial of coverage. Avoid agreements that include “hold harmless” or indemnification provisions that are one sided and not in the firm’s favor.

Firms that go along with clients in attempting to a handle problem internally without reporting it are sometimes surprised to find out later that the problem is much larger than it first appeared to be. If the problem was not reported timely in accordance with the policy, the claim might not be covered.

Claims and potential claims should always be reported as soon as possible. Do not take any action on them without guidance from your risk adviser. If CAMICO determines that it is appropriate to retain legal counsel to assist with a potential claim situation, the legal expenses will be absorbed by CAMICO.

Some insurance programs discourage policyholders from reporting problems by providing premium credits for claims-free status. This approach in effect encourages policyholders to handle potential claims on their own—a dangerous practice with potentially disastrous financial and reputational consequences for a CPA firm.

CAMICO has always encouraged policyholders to report early so that disputes and potential claims have a better chance of being resolved early, enabling the firm to avoid time-consuming troubles and remain focused on servicing their clients.

We take pride in the depth and variety of benefits and resources CAMICO offers to our firms. When you purchase CAMICO’s Accountants Professional Liability or Employment Practices Liability insurance, you get unlimited access to CPA-focused practice and risk management resources and tools. Even better – they are free and included with your policy! Here are a few things to know:

• Simply call our advice hotlines and request to speak with a Specialist who can help with a wide range of areas/concerns such as: arbitration/mediation, conflicts of interest, client screening, documentation, A&A, engagement and disengagement letters, technical tax questions, billing and collections, fraud, and internal control. Loss Prevention specialists also perform engagement and disengagement letter review services for policyholders.
• Receive free training and NASBA-accredited CPE that is available to you and all members of your firm. For example, CAMICO offers approximately 20 free CPE credits per year through webcasts.
• Benefit from practice management tools that provide you a support system of protection from liability. Some examples include articles, war stories, sample letter language, and more!
• Access to 150+ sample letters, educational articles, resource centers, and more on the Members-only Site.

Check out the Benefits section for details

Your firm can purchase a CAMICO policy in any one of these ways:

• Online: If you are a CPA firm with up to 3 CPAs and / or non-CPA professionals that has revenues of $500,000 or less and provides services such as tax, accounting, bookkeeping, review, compilation or management consulting – then obtain an online professional liability insurance (PLI) quote by going to our online application. You’ll be asked to answer a few simple questions, receive three quote options to choose from and can click to purchase.
• Application: If you’re looking for Professional Liability Insurance, then visit the applications page to download, complete and submit your state specific application. A CAMICO Account Executive will work directly with you to help identify your coverage requirements and secure the best insurance package for your firm.
• Other business insurance: Looking for a Workers Compensation or Business Owners Package quote, then call 800.652.1772 and request to speak with an Account Executive.

CAMICO is no stranger to challenging times. The program continues to be highly effective in protecting CPAs in difficult times as well as in good times — and through it all our risk management and claims professionals help CPAs with their current and evolving needs. 

Since the company’s founding in 1986, CAMICO has navigated three recessions by taking decisive actions when needed, all with a responsible approach to financial management, maintaining stable insurance rates over time, and prioritizing the continued protection, security and success of our policyholders. 

Currently we serve more than 8,000 firms throughout the U.S. and average a 94% renewal rate each year – reflecting strong loyalty in response to ‘the CAMICO Experience’. This was further validated in a 2020 CAMICO policyholder survey showing over 95% of respondents are likely to recommend CAMICO. 

Simply call 800.652.1772 and request to speak with a Specialist. CAMICO dedicates an entire Loss Prevention department to answer your questions. On call to help policyholders are CPAs and experts with a wealth of experience. Especially noteworthy is that all of the advice is free and included with your professional liability or employment practices liability insurance policy. Furthermore, we do not limit the frequency or duration of policyholder consultations with our Specialists. We want you to call and we encourage it!

Yes we can. CAMICO Loss Prevention Specialists are happy to review and comment on your drafted engagement letters. Letters can be emailed to us and we’ll get back to you with an estimated turnaround time.  We also have 150+ sample engagement and disengagement letter templates available to you as a policyholder on the Members-only Site.

When evaluating Accountants Professional Liability Insurance programs, CPAs often look for “apples to apples” comparisons — which may involve insurance coverages, limits, premiums and deductibles — to determine the best deal. But, just because programs may look similar, it doesn’t always mean they are. That’s why we recommend you consider which program gives you the best value and return on your premium. 

While the cost of premium is a major consideration for any firm, we encourage CPAs to consider the potential consequences of choosing a carrier just on that one factor. Questions to ask include:

• Will the carrier be there to fully support the firm when the firm really needs expert guidance?
• Does the carrier provide the advice and resources needed to help CPAs avoid and minimize damages?
• Is the program dedicated to the profession and do the insurance professionals there have a complete understanding of what CPAs do?
• How long has the program been insuring CPA firms and how many CPA firms do they insure?

Another point to consider is quality of service and responsiveness. You want to choose a carrier who answers your call and returns messages in a timely manner. So, you have peace of mind that they will be there to help when you really need it. 

Deciding which professional liability carrier or program to choose has become more complex in recent years, but the important questions remain the same:

• Does the company have the commitment and stability to support CPAs in the long term?
• Does the company have the expertise to help the firm avoid disputes or minimize damages if they arise?
• How well does the company understand the challenges faced by CPAs? Does it have solutions to address CPA firms’ evolving needs?

With CAMICO, the answer to all three questions is “Yes.”

Stability: CAMICO provides stability with 37 years of protecting CPAs. Over the years, other insurance carriers have come and gone, entering the market when a profit is to be made or abandoning the market when it’s not profitable. If the CPA has a claim, such instability can have a negative effect on the outcome of the claim and its consequences for the firm, including financial and reputational losses. 

Unlimited access to expertise: At CAMICO, we don’t pay lip service to the risk management services we provide – we are genuinely invested in the success of our members, providing hands-on guidance and support when you need it. Best of all, the advice is included with the program, so you don’t have to worry about how many times you call or for how long: You’re never on the clock. 

Proactive and early communications: CPAs have always been and remain CAMICO’s entire focus. We know our customer base, and we believe in hearing from our members. We encourage CPAs to contact us as often as they need – open lines of communication and early notification works best for all.

This is one of the common misconceptions heard by CAMICO Account Executives when speaking with CPA firms considering a switch from their current professional liability insurance carrier. If you are ever feeling that there must be better options, you should feel empowered to explore and consider switching programs.

The key is to apply with other programs before your current insurance expires, so you do not experience a coverage interruption. Most insurance applications include a question about existing coverage and how far it goes back for prior acts – which is determined by your ‘Retroactive Date’ (aka, ‘Prior Acts Date’). This lets the Underwriter know that there is prior acts coverage to include with any insurance proposal. You should be wary of any new coverage proposal with a Retroactive Date that does not match your current coverage.

We have a team of Account Executives and Underwriters on staff who you can talk to for help with your questions.  Direct account executives can assist in the following ways:

• Help obtain a free, no-obligation insurance quote 
• Explain product coverages and limits to help CPAs better understand what is included in the policy 
• Help identify coverage requirements, determine optimal coverage limits, provide recommendations, and answer questions about premiums 
• Secure the best insurance package for the firm

Each firm is also assigned a dedicated Underwriter who can help address coverage questions and concerns. Underwriters are available to meet with policyholders via conference calls. This gives policyholders an opportunity to discuss the CAMICO program while giving the Underwriters a better perspective of the policyholder’s business to help reduce the policyholder firm’s risk and improve CAMICO services.

CAMICO uses a team approach when supporting policyholders with each department specializing in expertise, guidance, and support in a specific area.

Customer Service: CAMICO has dedicated, in-house Customer Service representatives who are the first points of contact for anyone calling the CAMICO hotlines. This team also supports members who have general inquiries or questions.

Sales: Potential policyholders speak with our direct account executives who can assist with obtaining an insurance quote, explaining coverages, identifying coverage requirements, answering questions about premium and more.

Underwriting: Each policyholder firm has a dedicated Underwriter who is the firm’s primary contact for coverage questions and concerns. 

Claims Handling, Potential Claims and Subpoenas: CAMICO’s team of dedicated, in-house Claims specialists works to develop equitable resolutions that best protect the interests of policyholder firms. Our Claims specialists also provide assistance with potential claims matters or questions.  

Loss Prevention: CAMICO’s in-house Loss Prevention team of specialists assists policyholders with ways to minimize liability risks and help keep CPAs current on accounting liability trends, changes, and risk management best practices. We have advice hotlines available for general loss prevention questions, tax advice, accounting & auditing and employment practices.