Real-World Case Study
A small two-person accountancy firm in Chicago was handling a client’s corporate accounts. During a routine audit, they missed a critical VAT threshold that had been breached. The client ended up with an unexpected six-figure tax liability plus HMRC penalties.
The client sued the firm for negligence.
Without professional liability insurance for accountants, the firm would have faced:
- Legal defence costs: $80,000+
- Settlement payment: $140,000
- Total exposure: $220,000+
With their professional liability policy, the insurer handled the legal defence and covered the settlement. The firm paid only their $2,500 deductible. Total out-of-pocket: $2,500 versus $220,000.