Report Potential Claims as Early as Possible.

• Position: Tip of the Month

The sooner claims and potential claims are reported, the more effective an insurance carrier can be at achieving an early resolution. Early reporting will also help assure coverage for the potential claim. Some insurance programs encourage early reporting by reducing the deductible, and if the need arises, will absorb legal expenses, prepare tax penalty abatement requests, draft talking points for communicating the facts of the situation with the client, and provide subpoena and other services.

CPAs are often so busy that they don't recognize or acknowledge a potential claim as it is developing. This lapse can result in a loss if a claim is later made, but is not covered because of late...