The AICPA Employment Practices Liability Program is dedicated to providing superior claims assistance. Over the past decade, CNA, the Program underwriter, has handled over 17,000 claims and potential claims against accountants and is committed to being there for you when you need us most.
Your Professional Reputation is Important
The AICPA Professional Liability Insurance policy is written on a "claims made and reported" basis, which means it covers claims when they are made, not when the error happened or the damages were discovered. The "claim" must be made during the policy term and reported to CNA in writing as soon as possible, but in no event after the policy term has expired.
Policy to Pay Claims Efficiently and Fairly
An insurance policy is much more than a piece of paper ― it's a commitment to deliver the claims service that stands behind the policy. CNA is committed to:
- Providing timely coverage analysis.
- Making prompt assignments to defense counsel.
- Continuously consulting with you and your defense counsel on the issues of defense, settlement, and claim resolution.
What Is a Claim?
Before discussing how to report a claim, you have to know exactly what it is you need to report. That's why it is important to understand the definition of a claim.
A claim is defined in the policy as "a demand received by you for money or services naming you and alleging an act or omission, including personal injury or advertising injury, in the rendering of professional services. A demand shall include the service of suit or the institution of arbitration proceedings against you." A claim could be any of the following:
- A summons and complaint alleging an act or omission in the rendering of professional services.
- A letter or verbal threat or demand for services or money from you because of acts or omissions arising from professional services you provided.
- An oral threat or written complaint indicating that a party is holding you responsible for damages arising from professional services rendered.
- Notice of arbitration filed against you for alleged damages arising from your professional services.
If you are in doubt whether a claim has been made against you ― REPORT IT.
The way to ensure the fastest possible response from CNA in the event you receive a claim is to:
- Provide CNA with written notice as soon as you are aware of the claim.
- As soon as possible, send copies of all papers to CNA and to any other insurance carrier that may provide coverage for the claim.
- In your written notice to CNA, identify your policy number, firm name, telephone number and name of the individual we should contact within your office, date you received the claim, claimant’s name, and a brief description of the services you rendered for the client.
- All of the above can be e-mailed to email@example.com or faxed to 866-419-6276
Remember, the sooner you give notice, the sooner we can take action. In addition, make sure you take the following important steps throughout the claim process:
- Refrain from signing or accepting any release from any party without obtaining approval from your CNA claim professional.
- Avoid discussing, commenting upon, or taking issue with any information you receive regarding judicial or administrative proceedings.
- Be sure you do not admit liability, consent to any arbitration or judgment, or agree to any settlement without CNA's prior written consent.
- Be prepared to spend a substantial amount of time with counsel and your CNA claim professional to aid in the investigation, defense, and settlement of your claim.
After CNA receives your notice of a claim, you can expect us to take the following action:
- Assign your case to an accountants liability claim professional who is experienced in handling claims in the territory in which you are located. Your CNA claim professional handles solely accountants liability claims, so you know you will get the experience and knowledge you deserve.
- Acknowledge receipt of your notice of a claim, inform you that we have created a claim file and provide you a claim file number for future reference, and introduce you to the claim professional assigned to your case. We try to do this within the first 24 hours after we receive your notice so you know we are here for you.
- Review your insurance policy, advise you as to coverage issues that may be presented by the allegations made against you, and if necessary, issue a Reservation of Rights letter explaining the coverage afforded to the claim.
- Appoint qualified and experienced defense counsel to represent you, if necessary. In order to be considered for AICPA defense counsel, an attorney has to have specific litigation experience in defending accountants, meet basic standards in knowledge of the accounting profession, and be a partner in their law firm. So, you can be assured appointed counsel has the necessary skills to represent you.
- If necessary, appoint a qualified accounting expert in the area of practice involved in the claim to review your engagement and workpapers and provide an evaluation of the defenses available to us. These experts also assist defense counsel in the strategic planning of your defense.
- Review counsel's investigation as long as the claim is pending, communicating directly with counsel and you as needed. Counsel is always instructed to keep you directly informed throughout the claim process.
- Consult with defense counsel to consider the defense, settlement, and resolution of the claim, and advise you as to our recommendations.
Who Pays For Your Defense?
Read your policy carefully. In most instances, the insurance policy provides for your defense subject to a deductible requirement that you are obligated to pay. However, state regulations often apply to the handling of deductibles and your policy will specifically delineate how your financial obligation applies. In some instances, your defense costs reduce the policy’s limits of liability. In this case, you will be advised as to the remaining amount of your limits on an ongoing basis throughout the defense of the claim. Whatever your financial responsibility, CNA will advise you how it applies, or may apply, in the event of a claim.
Who Will Handle Your Claim At CNA?
Your accountants liability claim will be handled in a centralized unit at CNA's home office in Chicago, Illinois by claim professionals who only handle claims against accounting professionals. Our staff has been extensively trained in proper claim procedures and the handling of litigation management. We annually undergo training by accounting experts in all areas of practice to help assure that we have working knowledge of the profession, the standards, and the services being provided. We follow and analyze trends in claims and in the legal environment to help assure that we are up-to-date in all the legal defenses. CNA assigns claim professionals by territory, so they are experienced in handling claims and litigation in your specific jurisdiction.
What Is a Reservation of Rights Letter?
A Reservation of Rights letter from us is not a denial of coverage under the policy. When a claim is made, each coverage situation is evaluated on its own merits, based upon the facts and allegations. These allegations, when reviewed with the policy terms, conditions and exclusions, determine the nature and extent of coverage.
A plaintiff may make allegations, which if proven, would bar coverage under certain policy provisions. On the other hand, if those allegations are not proven, such provisions may not bar coverage. Other policy provisions may apply simply by virtue of the nature of the allegations against you. Thus, coverage sometimes is obvious for some allegations and not for others.
Proper insurance guidelines ― many times established by state regulations or laws ― require that an insurer advise their insured as soon as possible of any coverage issues. The Reservation of Rights letter is the vehicle used to provide you with that advice. The letter will indicate what allegations might, if proven, preclude coverage under the policy, provide you with the policy language potentially impacted, and indicate what rights you have to help protect yourself.
The letter will also point out that the activities we undertake as your insurer in connection with the claim should not be construed as a relinquishment of any rights provided by the policy contract. So, the Reservation of Rights letter is protection for us and for you. We can continue to evaluate and investigate the claim and you are alerted to any coverage issues which may be associated with your claim in the future. We refer to this process as "handling the claim under a reservation of rights."
What you should understand is that we are not agreeing with or supporting a plaintiff's allegations by issuing a Reservation of Rights letter. A plaintiff must prove the allegations. When a claim is being handled under a Reservation of Rights, the policy provides a defense "even if the charges of the claim are groundless, false or fraudulent."
When defense of a claim is provided under a Reservation of Rights, you may have the right to retain personal counsel to assist in the defense. Depending on your state law, personal counsel costs are borne by you or the insurance company. We will advise you of your rights in such an instance.
Dependability Is One of CNA's Greatest Assets
Dependability and experience are CNA's greatest strengths, and you can expect our staff to deliver responsive, reliable service. Substantial financial strength is another of our greatest assets, especially when it comes to keeping our commitments and paying claims.
CNA is a strong, stable organization with products and services you can count on now and in the future. We have earned consistently high ratings from the top insurance rating services.
If you have any questions about what to expect in the event of a claim, please contact us.
Nothing contained in the above overview should be construed as an acknowledgement by any of the CNA insurance companies that a given situation would be covered under a particular accountants professional liability insurance policy. To determine whether a specific situation may be covered, please refer to your current policy.
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