Indemnification ...Understand Your Risks.

• Position: Tip of the month

Clients often try to embed indemnification or hold harmless clauses in agreements with CPA firms. Many of the clauses are inappropriate for CPA services or are overly broad, even to the point of shifting all liability, including the client's negligent acts, to the CPA firms. Some contracts may use boilerplate language that clients employ for all independent contractors. As such, they contain many legal conditions and limitations not appropriate for accounting services.

Before signing such agreements/contracts or agreeing to any indemnification:

* Consult an attorney in your jurisdiction. Indemnification law varies by state.

* Push back. You don't have to accept the proposed terms, preprinted or not.

* Educate your client regarding the scope and limits of your engagement. Doing so may convince your client that a broad, all-encompassing...