Making sure does not simply mean signing a contract, but responding to the need to prevent events that could be dramatic for the family and professional economy. In our opinion, it is not enough to fulfill the legal obligations, but we must invest to guarantee a peaceful future.
Insurance policies respond to the risk principle. The professional ones, which however follow this logic, have the dual function of:
- guarantee the satisfaction of legal obligations
- to protect the Professional from any economic damage that could be even of high entity.
So let’s see what legal obligations the Insurance Professional must meet today.
From 2017, a Professional TPL policy must first cover all the professional responsibilities provided for by law up to a certain limit set based on the type of damage (material and direct damage, financial loss, business interruption …) and the volume of business, but also the value of the assignment.
From 15 August 2013 it was sanctioned by Legislative Decree 138/2011, art. 3, paragraph 5, lett. And, the obligation for the Professional, to protect the customer, to ” take out suitable insurance for the risks deriving from the exercise of the professional activity “ . The same decree provides that “ at the time of taking on the assignment, the Professional informs his client of the details of the professional policy stipulated and the relative insurance ceiling and any subsequent changes. “
Subsequently specified by art. 5 paragraph 2 of Presidential Decree no. 137/12 of the reform of the professions, the violation of the regulatory provisions constitutes a disciplinary offense and no longer just a deontological offense. In this regard, with regard to the possible violation by the professional of the obligation in question, the CNDCEC also intervened which with its own clarification (PO 108/2014 – ” Violation of the obligation to stipulate an insurance policy “) reiterated that ” the violation of the obligation of insurance policy constitutes a disciplinary offense falling within the competence of the Disciplinary Board which, having ascertained the violation following a disciplinary procedure, must apply the sanction – among those indicated in art. 52 of Legislative Decree 139/05 (censorship, suspension for a period of time not exceeding two years, removal from the register) which it deems most appropriate, in compliance with the principle of proportion between the infringement and the sanction “. Obligation to which the recent STPs, Companies between Professionals, which carry out activities reserved for Chartered Accountants and Accounting Experts, are also subject, under penalty of impossibility for them to register in the special section of the same register.
It should be noted that the obligation of the professional policy finds its presupposition not so much in the registration of the Professional in the relevant register, as in the actual exercise of the professional activity in his own name: therefore a Chartered Accountant who lends his professional ‘inside a data processing center (for which there is no legal obligation to stipulate a professional policy) will be required to have appropriate insurance coverage due to the nature of the professional service carried out within the CED. While the Professional who works within a Professional Firm is not required to stipulate if the Firm takes on the tasks from clients. In this case, the firm will have to have a policy.
As we have said above, however, a good Professional Liability policy not only fulfills the legal obligations, but is an opportunity to protect the Professional’s assets from any claims for compensation from third parties, including customers .
The stipulation of a professional Rc guarantees coverage from faults, damages and liability, as better specified below:
- from pecuniary damage,
- contractual civil liability,
- gross and slight negligence,
- privacy violations,
- faults of employees or collaborators,
- tax penalties paid to clients for errors or omissions by the professional,
- legal costs and expenses, conduct of the study,
- retroactivity of the coverage of the insurance policy,
- loss of documents,
- from defamation and insult
The cost for taking out a Professional Third Party Liability policy therefore depends on the type of professional activity carried out and the related risk, the maximum amount offered by the company and chosen by the Professional, its annual turnover, previous claims, the type of company, the deductible and by the guarantees offered.
The cost is therefore the result of a series of variables, all of which must be carefully assessed in order not to risk finding oneself with too limited coverage of the guarantees and consequently exposed to risks that cannot be compensated with the policy underwritten.
In this regard, it is advisable to pay close attention to completing the questionnaire attached to the contract of the Insurance Company’s Professional TPL policy, as an untruthful or incomplete statement by the professional could allow the company to challenge the questionnaire and not pay, o partially pay any damage foreseen in the policy. It follows that all the extensions or exclusions that the Professional intends to activate according to their specific needs will be well identified on the questionnaire.
In the contract that the professional will sign, it is important that there is the presence of the gross negligence clause , that is, the coverage of the damage in the event that damage should be feared to the customer due to negligence, inexperience, imprudence or non-compliance with the laws, regulations and of public orders by the Professional.
“Conditio sine qua non” for the coverage to be effective is the presence of the retroactivity clause and the posthumous guarantee : this allows the professional to be protected and therefore have insurance coverage, before signing the policy, provided that at the time of signing the policy the accountant was not aware of the existence of the damage. Each Company provides for a maximum period of retroactivity, beyond which it is not liable for the damage, this period is usually 3 years but can also be extended.
The posthumous guarantee, on the other hand, is an additional coverage, which the Company offers to the insured to cover any damage that emerges after the termination of its activity.
Other important aspects to consider are:
- the professional liability policy limit ;
- inclusion in the insurance contract of legal expenses (Legal Protection coverage)
The compliance visa deserves an in-depth study as it is also one of the elements of evaluation of the insurance product to be signed.
The compliance approval (Legislative Decree no. 241 of 09/07/1997) constitutes one of the levels of the control activity attributed by the legislator to subjects outside the financial administration on the correct application of tax regulations.
The affixing of the compliance visa is mandatory for:
- the presentation of the “form 730” declarations;
- the offsetting of receivables, relating to VAT, direct taxes, IRAP and withholdings of an amount exceeding 5,000 euros per year;
- the submission of annual and quarterly requests for refunds of VAT credits for amounts exceeding 30,000 euros.
In addition to the tax assistance managers of the CAF, the following are entitled to affix the compliance visa:
- those enrolled in the register of chartered accountants and accounting experts;
- those enrolled in the register of labor consultants;
- those enrolled in the roles of experts and experts held by the chambers of commerce, industry, crafts and agriculture for the tax sub-category as of 30 September 1993, in possession of a degree in law or in economics and commerce or equivalent or accounting (these subjects are not entitled to affix the approval of conformity on the 730 model declarations).
To be able to affix the light or compliance visa, the above subjects must also meet the following conditions:
- be registered in the list of qualified entities held by the competent regional offices;
- be in possession of the necessary authorization for electronic transmission (Revenue).
After verification by the Regional Management, the qualified professional will be registered in the computerized list of subjects entitled to issue the compliance visa.
By affixing the compliance visa, the Professional certifies the execution of the checks indicated in the Decree of the Ministry of Finance no. 164/1999 art. 2, according to which the issuing of the conformity visa implies:
- the confirmation of the correspondence of the data shown in the return with the results of the relative documentation and the provisions governing deductible and deductible charges, deductions and tax credits, the deduction of withholding taxes;
- the verification of the regular keeping and conservation of the obligatory accounting records for the purposes of income taxes and value added taxes;
- the verification of the correspondence of the data shown in the declaration with the results of the accounting records and of the latter with the relative documentation.
In addition to this, those enrolled in the register of chartered accountants and accounting experts and the register of labor consultants are granted the right to affix the approval of conformity also on declaration 730.
For registration in the computerized list on the Revenue Agency website, the following documents must be attached:
- original or photocopy of civil liability insurance policy;
- declaration relating to possession of the authorization for the electronic transmission of declarations issued by the Revenue Agency;
- declaration regarding the existence of the subjective requirements, pursuant to Article 8, paragraph 1, of Ministerial Decree 164 of 31 May 1999 and the absence of suspension (and / or cancellation) measures from the register of membership;
- commitment to communicate any changes in the data, elements and other acts indicated, within 30 days from the date on which they occur.
The insurance policy relating to the affixing of the compliance visa, this is the important step:
- must guarantee the risks deriving from the affixing of the conformity visa , art. 35 Legislative Decree n. 241/1997, distinguishing whether or not the activity of affixing a visa on the 730 forms is included in the exercise of this activity;
- if the professional opts to affix the approval on the 730 declarations , the explicit provision of coverage of the new risk must be contained;
- it must have a ceiling of at least 3,000,000 euros ;
- it must provide for full coverage of any damage suffered by the taxpayer , the State or other taxing body (in the case of form 730 declaration), not including deductibles or overdrafts, and provide for compensation in the five years following the expiry of the contract.
In case of discontinuity of the insurance coverage, the Professional must request new authorization from the competent Regional Management, resubmitting a new communication and the required documentation.
In conclusion, we believe it is important that the Professional privileges the choice of insurance coverage that not only protects him from legal obligations, but allows him to carry out his business with the certainty of being indemnified from claims that could seriously compromise the continuation of his business. .
Other policies to be seriously considered in order to be able to carry out your business with confidence are:
- Multi – risk office policy that protects against a series of unforeseen events that can occur at the professional’s office;
- Cyber Risk which covers computer damage and identity theft;
- Accident policy, already mandatory for other categories of Professionals and which is very likely to become so also for accountants;
- LTC (Long Term Care) and IPM (Permanent Disability due to Illness) policy
- Life Savings Policy