Risks for Self-Employed Accountants: Organisation is Everything
Anyone who runs a company has a lot of specifications and obligations to deal with. Especially when it comes to the accounting area, the law prescribes exactly how a company must be set up. In order to properly comply with these regulations, many entrepreneurs trust the expertise of professionals.
One of these professionals is an accounting service insured through exali. They received signed applications from one of their customers for the payment of short-time work benefits for three months. After reviewing the documents, they forwarded the documents to the competent employment office by post in a simple letter. Up to this point, the procedure ran smoothly. But the unpleasant suprise came a few months later.
No Mercy with Expired Deadlines
The months went by, but neither the external accountant nor their client received any feedback from the employment office. After inquiring, they were told that the documents for applying for short-time work benefits had never reached the office. Since the applications were sent by ordinary internal mail and not, for example, by registered mail, the whereabouts of the applications could not be determined. Unfortunately, a quick upload of the applications to the job centre’s website could not solve the problem either, because the three-month deadline for submitting the applications had long since expired.
The opportunity to receive short-time work benefits was gone, and the damage to the client was enormous at more than 10.000 euros. Understandably, the client did not want to be left with these damages. After all, they had given the documents to their external accountant in good time for examination and forwarding. The client trusted the accountant to work diligently and in a timely manner. So the client demanded compensation from the accountant.
Accountant is Liable: Legally, the Risks Lie with the Sender
The affected self-employed accountant forwarded the entire miserable affair to the insurance experts from exali. They clarified the claim together with the claims department of the insurer. The conclusion: Even if the accountant assumed that the documents would be reliably sent to the employment office by post, the sender is legally responsible for ensuring that the documents actually arrive there on time. Although the external accountant did not directly cause the “loss” of the documents, he is nevertheless liable for the timely submission of the documents (receipt of the documents at the employment office counts here). The accountant should have sent such important documents such as applications for short-time work benefits in a traceable manner, e.g. by registered mail.
But the case goes further. To paraphrase the saying “misfortune rarely comes alone”, the fact that the Professional Indemnity Insurance contract was new and was only concluded after the documents had been lost made the damage event even more explosive. Nevertheless, the Professional Indemnity Insurance assumed the client’s entire claim for compensation of over 10.000 euros.
The accountant benefited from two important circumstances: On the one hand, at the time the application was submitted, the accountant was not aware that the applications had disappeared and was able to truthfully state when applying for coverage that he was not aware of any circumstances that could lead to a claim. On the other hand, the Professional Indemnity Insurance included retroactive insurance coverage for six months before the start of the insurance.
Retroactive Insurance Coverage
The accountant was saved by the clause contained in the insurance conditions for indemnity insurance provided by exali on so-called “reverse insurance without the existence of a preliminary contract”. This consumer-friendly clause states that the policyholder also enjoys full insurance coverage if a damage event occurs up to six months before the conclusion of the contract. The prerequisite for this is, of course, that there is insurance coverage for this damage event and that the policyholder was not yet aware of the damage.
Comprehensively Insured, Even in the Event of Organisational Omissions
With a Professional Indemnity Insurance from exali, the insurer generally checks all claims and claims for compensation for their justification and fends off unjustified claims on your behalf. If a claim proves to be justified - as in this case - the insurer not only bears the costs of the damage, but also, for example, assumes the expenses for legal assistance or experts. This means that you have a reliable partner at your side, both in the event of technical and organisational failures, who will support you in the event of a claim. Because no matter how careful you are, this damage event clearly shows: Even a small mistake can be expensive without a Professional Indemnity Insurance.
<span class='visible--desktop'>First-Party Cyber and Data Risks Insurance (FPC)</span>
<span class='visible--tablet'>First-Party Cyber and Data Risks Insurance (FPC)</span>
<span class='visible--mobile'>FIrst-Party Cyber and Data Risks Insurance (FPC)</span>
<span class='visible--desktop'><p><strong>This add-on protects your business from the risk of hacking, DDoS attacks or other internet crime.</strong></p>
<p>Reimbursed/covered:<strong> </strong>for example costs for the <strong>restoration of your IT systems</strong>, the commissioning of professional <strong>computer forensics analysts</strong> or specialised <strong>lawyers</strong> (including criminal defence) as well as for <strong>crisis management & PR</strong>. Additional costs for the quick elimination or avoidance of an interruption to your business are also insured.</p>
<h5>Further Examples of Damages We Insure</h5>
<ul class="liste">
<li>Damage to your own IT systems (from hacking)</li>
<li>First-party data rights claim (in particular spying on personal data)</li>
<li>Expenses for an (imminent) interruption of business (additional cost coverage)</li>
<li>Breach of trust damage (intentional damage to own IT by employees)</li>
<li>Costs for criminal defence (internet criminal legal protection)</li>
</ul>
<h5>Insurer Services</h5>
<p>The special benefit about this add-on is the assumption of your own <strong>costs</strong>, e.g. for the commissioning of:</p>
<ul class="liste">
<li>Computer forensics specialists</li>
<li>Specialised lawyers</li>
<li>Consultants to provide information to data owners</li>
<li>Professionals for PR & crisis management</li>
<li>Credit protection and monitoring services</li>
</ul>
<p>as well as the assumption of <strong>additional costs, e.g. for the use of third-party IT and computer systems.</strong></p>
<p>For this add-on an <strong>deductible of € 1,000 per damage event</strong> applies.</p>
<p>For more details, see Section <strong>6. First-Party Cyber and Data Risks Insurance (FPC)</strong>, in the insurance policy terms and conditions.</p>
</span>
<span class='visible--tablet'><p><strong>This add-on protects your business from the risk of hacking, DDoS attacks or other internet crime.</strong></p>
<p>Reimbursed/covered:<strong> </strong>for example costs for the <strong>restoration of your IT systems</strong>, the commissioning of professional <strong>computer forensics analysts</strong> or specialised <strong>lawyers</strong> (including criminal defence) as well as for <strong>crisis management & PR</strong>. Additional costs for the quick elimination or avoidance of an interruption to your business are also insured.</p>
<h5>Further Examples of Damages We Insure</h5>
<ul class="liste">
<li>Damage to your own IT systems (from hacking)</li>
<li>First-party data rights claim (in particular spying on personal data)</li>
<li>Expenses for an (imminent) interruption of business (additional cost coverage)</li>
<li>Breach of trust damage (intentional damage to own IT by employees)</li>
<li>Costs for criminal defence (internet criminal legal protection)</li>
</ul>
<h5>Insurer Services</h5>
<p>The special benefit about this add-on is the assumption of your own <strong>costs</strong>, e.g. for the commissioning of:</p>
<ul class="liste">
<li>Computer forensics specialists</li>
<li>Specialised lawyers</li>
<li>Consultants to provide information to data owners</li>
<li>Professionals for PR & crisis management</li>
<li>Credit protection and monitoring services</li>
</ul>
<p>as well as the assumption of <strong>additional costs, e.g. for the use of third-party IT and computer systems.</strong></p>
<p>For this add-on an <strong>deductible of € 1,000 per damage event</strong> applies.</p>
<p>For more details, see Section <strong>6. First-Party Cyber and Data Risks Insurance (FPC)</strong>, in the insurance policy terms and conditions.</p>
</span>
<span class='visible--mobile'><p>Protection against hacking damage to your own IT systems, DDoS attacks, computer misuse, theft of data carriers and other data rights violations and the majority of the resulting expenses and costs.</p>
</span>
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Add-on: AI-Related First-Party Losses (ARL)
<h5>What is covered?</h5>
<p>The policy covers <strong>first-party losses</strong> incurred by you or your company <strong>as a result of malfunctions when using AI systems</strong>, such as</p>
<ul class="list--checkmark">
<li>Incorrect, incomplete, or hallucinated results from AI tools</li>
<li>Erroneous decisions or unintended processes by AI agents and applications</li>
<li>Incorrect processing or interpretation of data by AI systems</li>
</ul>
<h5>What is reimbursed?</h5>
<p>Your <strong>additional costs</strong> for remedying the damage are reimbursed, including, for example:</p>
<ul class="list--checkmark">
<li>Analysis and correction of AI errors (e.g., root cause analysis, rollback, deactivation)</li>
<li>Restoration, cleanup, or recreation of corrupted data</li>
<li>Additional personnel costs (e.g., overtime or replacement staff)</li>
<li>Manual post-processing and temporary solutions to maintain operations</li>
<li>Costs for external service providers, consultants, or experts</li>
</ul>
<h5>Important Limitations</h5>
<ul class="list--checkmark">
<li>No coverage for loss of revenue</li>
<li>No coverage for further development or new AI functions</li>
</ul>
<p>The compensation limit is € 50,000 per insured event and insurance year; the deductible is € 1,000.</p>
<p>For more details, see <strong>Section A.7, AI-Related First-Party Losses (ARL)</strong>, in the insurance policy terms and conditions.</p>
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Add-on: Engineering Activities (ENG)
<h5>What is covered?</h5>
<p>These activities are insured under an open-ended occupational coverage policy, specifically:</p>
<ul class="liste">
<li>Development of hardware and software in mechanical and plant engineering (including embedded software)</li>
<li>Programming of control, automation, CNC, and PLC applications</li>
<li>Design, technical drafting, and CAD/CAM services</li>
<li>Prototyping, testing, simulations, and commissioning</li>
<li>Robotics applications and engineering services, e.g., in the field of renewable energy or regulated environments (e.g., pharmaceutical, biotech)</li>
</ul>
<p>Certain types of <strong>property damage</strong> are also covered if they result directly from your engineering services.</p>
<h5>Scope of the Additional Coverage Module</h5>
<p>Coverage for clearly defined technical units, such as software modules, control logic, or interfaces that can be tested independently, including assistance with integration into an overall system.</p>
<h5>Important Limitations</h5>
<ul class="liste">
<li>No assumption of <strong>overall responsibility</strong> for complete systems</li>
<li>No coverage for damage occurring <strong>during ongoing operation</strong> or <strong>after acceptance</strong></li>
<li>No coverage for <strong>production downtime</strong></li>
<li><strong>No liability </strong>for product characteristics <strong>during subsequent use</strong></li>
</ul>
<h5>Deductible</h5>
<p>The deductible for financial loss and property damage is the same as the deductible selected for the financial loss insurance (FLI).</p>
<p>For more details, see the insurance terms and conditions under Section<strong> A.8 Engineering Activities (ENG).</strong></p>
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