The importance of policies that are up to date with changing legislation:
The legislative frameworks regulating different professional fields are in constant evolution. Because of this, it is crucial that professional civil liability policies are kept up to date at all times to reflect changes to the specific legislation and regulations that apply to each sector.
- Accountants: Accountants must be able to adapt to frequent changes in tax and accounting legislation. An up-to-date policy covers, for example, errors in certifying financial statements or tax declarations, protecting the professional against possible sanctions or claims for compensation for damages made by clients.
- Engineers: Technical and safety regulations are subject to constant revision. An appropriate insurance policy will take this changing scenario into account to offer protection in case of design or supervisory errors which could lead to damages to third parties.
- Lawyers: The evolving landscape of legislation and legal procedures demands for a policy which covers all liability arising from consultation errors or legal representation that does not comply with current legislation.
Keeping the policy up to date with the current legislative framework not only ensures effective coverage, but is often a legal or ethical requirement for practising law. For example, Article 12 of Italian Law No. 247/2012 requires lawyers to maintain a professional civil liability insurance policy.
Examples of Incidents Covered by Professional Civil Liability Policies:
A few examples of typical scenarios in which these policies provide protection are outlined as follows:
- Tax Consulting Errors: Due to a misinterpretation of a new tax regulation, an accountant advises their client to claim a deduction that is not permitted by law. This results in a fine issued by the inland revenue service. The policy covers the claim for compensation made by the client for the fine incurred.
- Design Defect: An engineer makes an error in the structural analysis of a new building. After construction, problems arise which require costly repair work. The policy covers the repair costs and any claims for compensation for damages made by the contracting client.
- Failure to Execute Legal Acts: A lawyer fails to complete a legal act crucial for their client’s case within the specified deadline, resulting in the client’s loss of the right to appeal. The client lodges a claim for compensation for the damages sustained, and the policy covers these costs.
In all of these cases, an up-to-date civil liability policy tailored for the specific needs of the professional plays a vital role in enabling the professional to withstand the financial consequences of a professional error.
For professionals such as accountants, engineers and lawyers, being certain that their professional civil liability policy is kept constantly up to date with the evolving legislative framework regulating their sector is just as crucial as having such a policy. This ensures effective protection and conformity with legislation, safeguarding both their personal assets and their professional reputation.
