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Management Liability for CPA Firms

Partners or managers within a CPA firm may be held personally liable for claims of mismanagement. A management liability endorsement may help avoid devastating personal financial losses. 

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1.800.221.3023

Management Liability for CPA Firms

Partners or managers within a CPA firm may be held personally liable for claims of mismanagement. A management liability endorsement may help avoid devastating personal financial losses. 

Get a Quote
Request an Estimate
1.800.221.3023

What is a Management Liability endorsement?

A Management Liability endorsement to your AICPA professional liability policy can help to limit exposure to individuals’ personal assets and a devastating financial loss. CPA firms can face management-liability related claims that may allege management wrongful acts such as mismanagement, misrepresentation, or neglect allegations, negligent mergers and acquisition activity, allegations of exercising poor judgment, and more. Adding management liability coverage to your professional liability policy, regardless of the size of your firm, can be a valuable addition to your insurance program.

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Why CPAs select it?

Because partners are involved in the day-to-day operations of your firm, they could be personally named alongside the firm in wrongful acts lawsuits commonly filed by clients, competitors, employees, regulators, vendors and creditors. A management liability endorsement can help CPA firms protect their executives’ personal assets against mismanagement allegations.

of members surveyed recommend the AICPA CPA Life Plan
96%

of those experiencing a management liability claim reported the legal action caused financial damages1

What it covers

  • The Management Liability endorsement provides coverage for damages and claim expenses arising from a covered claim alleging management wrongful acts committed by management liability insured persons in their capacity as such.

  • Management Wrongful Acts: Errors, misstatements, misleading statements, acts, omissions, neglect, or breach of duty committed or attempted or allegedly committed by the insured solely in their capacity as a Management Liability Insured Person (coverage limited to management capacity); or a matter claimed against a Management Liability Insured Person solely by reason of their status as such.

  • Insured Persons:

    • Any individual who has been, now is or shall become a duly elected director or trustee of the insured entity;

    • A duly elected officer of the insured entity;

    • An employee or committee member of the insured entity whether or not they are salaried; and

    • Any individual acting on the insured entity’s behalf in a voluntary capacity;  so long as all such individuals listed above are acting solely within their capacity as a Management Liability Insured Person

What it costs

The cost of management liability endorsement for your CPA firm is dependent on your coverage selections. Whether large or small, we’re committed to helping you achieve your goals and protect your future. To find out more information about how your CPA firm can benefit from a management liability endorsement, 
Request an Estimate

Why CPAs select Management Liability Endorsement

  • 96% of those experiencing a management liability claim reported the legal action caused financial damages1

  • $1 million maximum limit available to qualified and eligible insureds

  • No ‘hammer’ clause

  • $1,000 to $100,000 deductibles available to qualified and eligible insureds

    • Coverage limits and deductibles are separate from Professional Liability limits and deductibles

  • Endorsed by the AICPA and overseen by a Committee of CPAs in public accounting.

About the Underwriter

CNA is one of the largest U.S. Commercial Property and Casualty insurance companies. CNA provides a broad range of standard and specialized Property and Casualty insurance products and services for businesses and professionals in the U.S., Canada and Europe, backed by more than 120 years of experience.

Frequently Asked Questions

The management liability endorsement is currently available exclusively to Premier Professional Liability policyholders. We are here to help safeguard your livelihood and empower you and your firm’s future. If you’d like to discuss a Premier Professional Liability policy for your firm, please contact a Risk Advisor at (800) 221-3023 from 8:30 AM to 6 PM Eastern Mon-Fri.  

  • Mismanagement, misrepresentation, or neglect allegations.
  • Unfair business practices, business interference or allegations of exercising poor judgment.
  • Mergers and acquisitions have increased dramatically in recent years and involve potential risks, such as inaccurate disclosure, mismanagement of the consolidation, failure to achieve closure of the transaction, or failure to produce the intended results.

Although 96% of those experiencing management liability claims reported financial damages, other ramifications also arose. 42% reported a loss of productivity, 36% felt the loss had an impact on company morale, and 31% said the claim negatively influenced brand reputation. 1 

It’s difficult to say how much a claim may cost your firm specifically. However, the cost of the average management liability claim is currently hovering around $394,000.2  Learn more about how you can help protect your livelihood, reputation, and brand.

Disclaimer

One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. “CNA” is a registered trademark of CNA Financial Corporation. Certain CNA Financial Corporations subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities. Copyright © 2020 CNA. All rights reserved. 

 

1 www.trustedchoice.com 
2 www.trustedchoice.com 

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