Accounting
Shielding your accounting firm: Buying liability insurance
Today’s market for professional liability insurance is similar to markets in other industries in that it reflects the changes that the profession is undergoing. As the profession evolves, so does the market.
“As the CPA profession evolves and new services are offered, it makes for different risks,” explained Candace Coach, small firms sales manager at Aon, the manager for the AICPA Professional Liability Insurance program.
Among the factors to consider when shopping for a policy, she advises the prospective purchaser to consider whether the insurance carrier has the financial stability to take on the risk.
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“For some carriers, the risk is too large, leading them to exit the market,” she said. “For example, we haven’t seen any claims yet for the beneficial ownership filing requirements, but it could result in large claims down the road. We are one of the only carriers that offer coverage for this; however some CPA firms will go ahead and offer these services and assume they are covered.”
Coach anticipates that claims will be coming in as a result of firms offering services for BOI filing.
“We don’t know what the claims will look like, but there are specific guidelines that have to be followed, which could result in exorbitant fines assessed against the filer. Clients will be looking to the CPA to pick up the fee or the fine. As far as the market is concerned, some carriers will feel as though it is best for them to non-renew certain policies, and exit the market altogether and downsize to less risky professional services.”
Prospective buyers should look for “premium modifiers” that can lower the cost of a policy. These include claims-free history, continuing education, and various types of “best practices.”
The liability market is softening up a little, according to Stephen Vono, senior vice president at McGowanPro.
“It’s still somewhat of a hard market in large metropolitan areas,” he said. “A hard market is when there is a lot of claim activity and premiums go up. In a soft market there is less claim activity and premiums go down. It depends on the kind of services that are offered. Cyber is a little on the hard side, but it is beginning to see some softening because insurers have become better at underwriting guidelines in the last few years.”
“You should look for a carrier with an AM Best rating of ‘A’ or better,” said John Raspante, CPA, senior risk manager at McGowanPro. “It’s also best to get a carrier that has been in the space for at least five years. If they’re in it for five years or more, they’re familiar with the types of claims, policy limits, and other factors that might affect the decision.”
“In pricing a policy, they look at a number of factors,” he explained. “These include total revenue, loss history, number of staff, and areas of practice. Always look at ‘outside the policy’ options. If you have a million-dollar policy, legal expenses can exceed that very quickly, so it might be a good idea to get an extra million just for legal and defense costs. A traditional policy is inside the limit. If you have a $1 million policy, $250,000 in legal fees will reduce the limit to $750,000. So I recommend an outside-the-limit policy to cover legal and defense expenses, to preserve the underlying $1 million. It does cost more, but I recommend a buyer to go for the outside-the-limit addition if the difference in premium is not significant.”
Although it may not be particularly entertaining, it is important to actually read the policy, Raspante urged.
“You need to read the policy, especially the endorsements,” he said. “They either weaken or toughen the policy. If it says that in addition to the underlying coverage it will also apply to employment practice, that increases the insurer’s exposure. It may throw in a sublimit for nonprofessional liability exposure that doesn’t cover the full limit — that’s why you need to read the whole policy. When you get close to the end it looks like a lot of legalese, but you have to read the entire document. For example, on the last page there might be a service exclusion for international work, which means that anything outside the U.S. is not covered.”
The panel of experts put together by McGowanPro’s Vono, which includes underwriter Gary Sutherland, Anthony Carolei, the risk manager for Hanover Insurance, and CPA defense attorney Ralph Picardi, recommends the following factors to consider when assessing liability policies:
- Make sure the professional services definition is as broad as possible.
- Does the broker or insurance company understand what you do?
- Consider if your limits are sufficient, as legal defense costs are going up.
- Is your deductible appropriate? If you have a large deductible, will you struggle to pay that deductible in the event of a claim?
- Does the broker or insurance company provide supportive risk management services and education?
- Do not rely on your professional liability insurance policy to be the coverage for all your exposure. There are exposures that are better covered on a separate standalone insurance policy. Separate directors & officers liability insurance and separate cyber liability, employment practices liability, commercial crime, and fiduciary liability policies should be considered to cover all exposures for your firm.
Treasury Secretary Scott Bessent named Internal Revenue Service chief operating officer Melanie Krause as acting commissioner after the retirement of acting commissioner Douglas O’Donnell.
O’Donnell has been acting commissioner since January, taking over from former IRS commissioner Danny Werfel, who announced he would be
“The IRS has been my professional home for 38 years,” O’Donnell said in a statement Tuesday. “I care deeply about the institution and its people and am confident that Melanie will be an outstanding steward of the Service until a new Commissioner is confirmed.”
The IRS has been going through a period of turmoil, with an estimated
Senate confirmation hearings have not yet been scheduled for Long, but he is expected to be questioned about his record of
Until Long is confirmed, IRS COO Krause will now move into O’Donnell’s deputy commissioner role and serve as acting commissioner of the nation’s tax agency.
“On behalf of the Treasury Department, I want to thank Doug O’Donnell for his decades of public service and dedication to the nation’s taxpayers,” Bessent said in a statement Tuesday. “He has been a remarkable public servant, and I wish him the best in retirement. At the same time, Melanie Krause and the agency’s leadership team are well positioned to serve during this critical period for the nation in advance of the April tax deadline.”
Krause has served as IRS COO since April 2024 after acting as deputy commissioner of operations support since January of the same year. As COO, she oversees the operations including the Chief Financial Officer; Chief Risk Office; Facilities Management and Security Services; Human Capital Office; Office of Chief Procurement; Privacy, Governmental Liaison and Disclosure; Research, Applied Analytics and Statistics.
She began her career at the IRS in October 2021 as chief data and analytics officer. In this role, in addition to leading the RAAS team, Krause also coordinated research activities including using AI and other advanced analytics. Krause also served as acting deputy commissioner for services and enforcement from November 2022 to March 2023.
Prior to joining the IRS, Krause spent 12 years in the federal oversight community, including the Government Accountability Office and the Department of Veterans Affairs Office of Inspector General. Krause also maintains an active license as a registered nurse. She holds bachelor, master and doctoral degrees from the University of Wisconsin-Madison.
The Pennsylvania Institute of CPAs released a
The report analyzes how accounting firms in Pennsylvania are structuring compensation, navigating retention and recruitment challenges, and adapting their benefits to remain competitive.
Jennifer Cryder
“Our latest findings make it clear: salary alone isn’t enough to attract and retain top talent in today’s market and firms need to be thinking differently about what matters,” said PICPA CEO Jennifer Cryder in a statement. “Holistic compensation strategies that include competitive benefits, flexible work arrangements, and clear career development pathways are critical in today’s world. Above all, we intend for this report to provide firm leaders with the insights they need to build a sustainable workforce for the future.”
The report found the firms surveyed by PICPA are experiencing inconsistencies in their ability to retain talent, with 48.3% reporting an increase in staff retention, while 24.1% of the respondents saw a decrease and 27.6% said retention remained stable. Firms reported an average salary increase of 8% in June 2024, up from 5% in July 2023, indicating slow but consistent average salary growth.
Offering comprehensive benefits remains a priority, with 88.5% of the firms surveyed providing medical insurance, 80.8% offering dental coverage, and 73.1% including vision insurance for employees.
Efforts to attract talent are changing, with 58.7% of the firms that responded to the survey increasing their hiring activity over the past year, while 37.9% maintained steady recruitment levels.
Many firms are responding to employee expectations for work-life balance, with 80% of the surveyed firms allowing flex hours outside of core hours and 76.9% offering flexible work options year-round.
With over half (54.2%) of the surveyed firms identifying hiring and talent retention as a top priority in 2025, the report stresses the need for firms to move beyond traditional compensation models. The report found a shift toward total rewards strategies — integrating salary, benefits, professional development and work-life balance — is essential to attracting and retaining top talent in an increasingly competitive market.
The Lease Accounting Institute has launched the Certified Global Lease Accountant training program and professional designation.
The demand for lease accountants has increased with the adoption of new lease accounting standards, ASC 842 and IFRS 16, while the talent pool of accountants has decreased. The CGLA program is an online, self-study format that allows graduates to earn 16 CPE credits.
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“We are in the midst of a talent crisis in the accounting profession,” Matt Waters, founder of the Lease Accounting Institute, said in a
Waters is the lead instructor for the CGLA training program, with over 20 years of experience leading lease accounting teams at Home Depot, American Tower and CoStar Real Estate Manager.
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