How Much Insurance Is Enough?

In a litigious society, clients may sue for any number of reasons, even if you did nothing wrong. A professional liability insurance policy is a good way to protect a firm's financial stability in the unfortunate event of a claim. To decrease expenses and improve the bottom line, sometimes accounting firms review their professional liability needs as a consideration. There is no hard-and-fast rule as to how much insurance is enough, and several factors need to be considered. Firm revenue is one of the first items that should be reviewed. Next, a firm needs to review its contractual requirements. Another area to review is the firm's client list. The last consideration will always come down to the firm's overall comfort level with the limits on the liability insurance they are purchasing.