Disciplinary law · debt collection · employment law
Legal expenses insurance (rechtsbijstandverzekering) for accountancy firms
For an accountancy firm the disciplinary case is the one with the greatest consequences, and that is exactly what many business legal expenses policies leave out.
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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
Legal expenses insurance pays for assistance, not for loss. The lawyer, the proceedings and the external costs are included; compensation to a client is not. That belongs with your professional indemnity insurance (BAV). At an accountancy firm the two often run into each other: a dissatisfied client lodges a complaint and at the same time claims for the consequences of a set of accounts or a piece of advice.
Disciplinary law is the most difficult category here. A complaint to the Accountantskamer (the Dutch disciplinary court for accountants) is not a dispute with an opponent about money but proceedings about how you practise your profession, and many policies describe the cover precisely in terms of civil disputes. So ask explicitly whether disciplinary assistance is included and up to what limit.
There is also the administrative side: supervision of compliance with your licensing obligations and with the anti-money laundering rules leads to decisions you can object to. That falls under the administrative law module. Tax proceedings are in a module of their own again. See also the business legal expenses insurance.
What does legal expenses insurance for accountancy firms cover?
The structure of the cover in three parts, with an overview per situation below.
You choose yourself
Modules
The sections that suit your business.
Debt collection
Contracts and suppliers
Employment law and staff
Administrative law and permits
Lawyers
What you get
Legal assistance and legal costs, not compensation for loss.
Your own lawyer on your case
Legal costs included
Advice when a dispute is looming
Know in advance
Limits
Where the cover stops.
A three-month waiting period
Minimum financial interest per case
Maximum external costs
What is covered
Situation
Covered
Collection of an unpaid invoice
Sometimes
A dispute with a supplier over delivery
Yes
A dismissal case or employment dispute
Sometimes
An objection to a permit decision
Sometimes
A dispute that was already running when you took out cover
No
Tax proceedings without that module
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
Disciplinary law is a category of its own
A disciplinary complaint is not debt collection, not a contract dispute and not an employment case. For an accountant it is, however, the procedure with the heaviest consequences, because the outcome affects registration and therefore the right to practise. Many policies exclude disciplinary law or cover it only through an additional section. Have what applies confirmed in writing, including the maximum for external costs.
Legal expenses cover does not pay your client's claim
If a client holds you liable for a lost subsidy, an additional assessment or a badly structured acquisition, that is a professional indemnity matter under Article 6:162 of the Dutch Civil Code. The legal expenses insurer does not conduct or fund the defence if your professional indemnity insurer is already doing so. Report a file like that to both, because the defence costs run through the liability policy while a parallel dispute about your fee does fall under legal expenses.
Supervision and enforcement run through administrative law
Checks on your licence, on the quality of your audit practice and on compliance with the anti-money laundering rules do not end in civil proceedings but in a decision. An objection and appeal against it fall under the administrative law module, which is not in every standard policy. Without that module you face an enforcement process at your own expense, and that is exactly where the timescale, and therefore the cost risk, is greatest.
Tax proceedings are not included as standard
A dispute with the Belastingdienst (the Dutch tax authority) about your own return, or about a client's return in which you act, falls under a separate tax module. Without it, objection or appeal proceedings about an assessment are not covered, even where the substance concerns your advisory work. When taking out the policy, decide whether you want the module for your own firm, for your client work, or for both.
The three-month waiting period
A dispute that was already running or was foreseeable when you took out the policy is excluded, even after the waiting period and even if you switch to another insurer. So take out the policy while things are calm. This is very much an insurance you have before you need it.
What does your premium depend on?
The firm's annual turnover. The usual basis of calculation for business legal expenses cover.
Number of employees. Helps determine the expected number of employment law cases.
Statutory audit practice or not. An audit practice is subject to a heavier supervisory regime.
Modules chosen. Disciplinary law, administrative law and tax are rarely in the basic cover.
Maximum external costs. The limit for lawyers' and experts' fees per case.
Minimum financial interest per case. The threshold amount below which a case is not taken on.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your situation, your risk and your wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Not as a matter of course. A disciplinary complaint is not a civil dispute with an opponent, and that is precisely how many policies describe the cover. For an accountancy firm it is, however, the procedure that affects registration and therefore the practice. Ask explicitly about disciplinary assistance when taking out the policy, have the answer confirmed in writing and watch the maximum for external costs.
Does legal expenses cover also pay my client's claim for compensation?
No. Legal expenses insurance pays for legal assistance and legal costs, not compensation. A claim for professional negligence falls under your professional indemnity insurance, which conducts the defence and pays any compensation. If the same file also involves a discussion about your fee, report it to both insurers; the two lines are assessed separately.
Do I need a tax module?
Only if you want objection and appeal proceedings about assessments to be covered. They fall outside the standard cover, even where the dispute arises from your own advisory work. Decide in advance whether you want the module for the firm itself, for proceedings in which you act on behalf of clients, or for both; that difference determines the extent of the cover.
Is an investigation by the regulator included?
Only with the administrative law module. Supervision of the licence, of the quality of the audit practice and of compliance with anti-money laundering obligations ends in decisions, not in civil proceedings. An objection and appeal against those are not insured without that module, while processes of this kind take a long time and the external costs therefore mount up quickly.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
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