Liability Claims Increase in Economic Downturns

Source: Accounting Today

This article points out that there is a time lag in the emergence of claims, especially in the tax area. Claims may arise two to three years after the fact in financial statement preparation and four to five years for tax work.

In purchasing liability insurance you should evaluate the methods of dealing with claims. When you report a possible future claim to your insurer, it should immediately start the process of determining whether anything can be done to lessen the possibility of a claim or reduce its potential amount.

Accountants should also request endorsements to their policies that coverage will include fines and penalties.

For the complete article, click here and select the article “Liability Insurance: The blame game” in the October 20, 2008, issue.

From Accounting Today, October 20, 2008, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.

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