Think You're Lawsuit Proof? Think Again

Source: The Savvy CPA

Avoiding mistakes, doing business with friends, and limiting your practice to tax work are not enough to avoid getting sued. According to professional liability insurer CAMICO, the five top reasons CPAs think they won't get sued are:

1.  I have a low-risk practice. Even a firm with lower-than-average risk is vulnerable to lawsuits. Tax claims are the most common, with an average cost of more than $53,000.
2. I've known my clients for years. There are many examples of good client relationships that “soured due to financial problems.”
3. I don't make mistakes. Even if that's true, an unfavorable jury verdict can jeopardize your firm's future.
4. I don't have insurance so I won't be sued. Potential claimants won't know whether you're covered, and a lack of insurance won't stop them from going after your personal assets.
5. All of my assets are in my spouse's name. Your spouse's assets aren't necessarily immune from a lawsuit.

For the complete post, read “Five Reasons Why CPAs Don't Think They Will Be Sued.”

From The Savvy CPA, July 3, 2013, http://www.thesavvycpa.com.