Professional liability insurance

All CPAs are required to have professional liability insurance. Read below to find out why, who exactly is concerned, how to participate and how much it costs to meet this requirement.

Why

While the CPA status gives you rights, it also imposes certain obligations aimed at protecting the public. One of these obligations is participating in a group professional liability insurance plan.

Who

All CPAs, whether they provide their services directly to third parties, are employed by a business, an institution or a government, or are retired or not active professionally, are required to submit a declaration to the Fonds d’assurance responsabilité professionnelle des CPA du Québec administered by the Order, regardless of where they practice. Under the Règlement sur l’assurance de la responsabilité professionnelle des comptables professionnels agréés, all CPAs are covered by the Fonds. 

How

Each year, all CPAs must submit a declaration to the Fonds as part of the annual mandatory declaration of members. This declaration enables CPAs to determine which category of insureds they belong to and pay the corresponding premium based on the professional activities they perform and the income they earn from the professional services they provide to third parties. CPAs must submit the declaration to the Fonds and pay the premium by March 15 of each year.

Members must declare any change in their professional situation during the year to the Fonds and pay the premium adjustment, if applicable. To do so, they must fill out a new declaration

How much

The insurance premium is based on the risk associated with the various categories of professional activities. It ranges from $30 to $1,750 and is tax deductible at both the federal and provincial levels, provided the expense is related to the CPA’s job. Note that it is not tax deductible if the employer reimburses the CPA’s insurance premium, unless this payment is considered a taxable benefit.

CPAs who are employed by a company, an institution or a government and provide few or no services at all to third parties, which is the case with most of the Order's members, merely have to pay the modest premium of $60. This premium insures them in the event that a professional liability proceeding is instituted and their employer's insurance is insufficient or non-existent, and if they occasionally provide some professional services to third parties, including those they provide for free. For example, CPAs who prepare tax returns for their friends and family, assist in the bookkeeping of an association or sports club or give financial management advice to acquaintances incur their own professional liability and can be taken to court as a result.

It should be noted that the policy covers $1 million per claim, has no total annual limit, and that if you cease to practice or cease to be a member of the Order, you continue to be covered for any professional liability proceeding for six years afterward.

Categories of insureds and corresponding premiums

Members who provide services related to the CPA profession to third parties

Category  Premium 
Members who provide professional services valued above $9,999 to third parties within a firm or other entity or as self-employed members, either as partners, shareholders or employees who have been given the authority to sign reports or other documents
 $1,750
Members who are employed by a self-employed CPA or a firm that provides professional services to third parties (unless they have signing authority)  $500
Members who provide professional services valued below $10,000 to third parties within a firm or other entity or as self-employed members, either as partners, shareholders or employees  $60

Members employed by a business, an institution or a government

 Category Premium 
Members who work in a business, an institution or the public service or who operate a business, in Quebec or elsewhere in Canada

If you also provide services to third parties, refer to the previous category.
 $60

Unemployed members

Category Premium 
Members who do not practice the CPA profession under any circumstances, whether compensated or not, or who are unemployed  $60

Retired members without professional activities
This insured category is reserved for members who have retired member status or who will request retired member status with a view to obtaining it by next April 1 for purposes of the annual dues payable to the Order on March 15.

Category Premium 
Retired members with no income1  $30
1A retired member with no income is a member who is at least 55 years of age on March 31 of the current year, who does not earn income from any professional activity, and who has been entered on the roll of the Order for at least 10 years.

Retired members with income from employment or the operation of an enterprise
This insured category is reserved for members who have retired member status or who will request retired member status with a view to obtaining it by next April 1 for purposes of the annual dues payable to the Order on March 15.

Category Premium 
Retired members with income2 between $1 and $24,999 who work in a business, an institution or the public service or who operate a business, in Quebec or elsewhere in Canada  $30
2 A retired member with income is a member who is at least 55 years of age on March 31 of the current year, whose income from employment, the practice of the profession or the operation of an enterprise within the meaning of the Civil Code of Québec is less than $25,000 per year, and who has been entered on the roll of the Order for at least 10 years.

Retired members who are practicing the CPA profession by providing services to third parties, whether compensated or not

This insured category is reserved for members who have retired member status or who will request retired member status with a view to obtaining it by next April 1 for purposes of the annual dues payable to the Order on March 15.

Category Premium
Retired members who provide professional services valued below $25,000 to third parties within a firm or other entity or as self-employed members, either as partners, shareholders or employees who have been given the authority to sign reports or other documents.  $30
Retired members who provide professional services valued above $24,999 to third parties within a firm or other entity or as self-employed members, either as partners, shareholders or employees who have been given the authority to sign reports or other documents. $1,750 
Retired life members who are not active professionally

This category of insureds is reserved for members who have retired member status and who have been recognized as life members by the Order. To be life members, CPAs must have been entered on the roll of the Order for 50 years (consecutive or not) and have signed a declaration covering their obligations. CPAs may have been members in another province, but must have been members of the Quebec CPA Order for at least 25 years. This category of insureds does not include life members who are not retired or who are still active professionally (whether or not they are retired).

 Category Premium 
Retired life members who are not active professionally  $0

INSURANCE COVERAGE

Changes to the insurance coverage of Quebec CPAs under the Fonds d’assurance are summarized below: 

  • Any member with retired status for purpose of paying dues to the Order and who provides professional services valued below $25,000, instead of $10,000, will pay the minimum premium of $30.
  • The definition of professional services now includes services rendered for condominium management, mediation and mortgage broking.
  • Scope of coverage is now limited to Canada.
  • Cyber risks exclusions have been clearly stated in the policy.
  • Members holding the securities of a reporting issuer, and who are the subject of a claim filed by this issuer, are covered.
  • Withdrawal of money-management and cheque-signing authority exclusions on behalf of clients or third parties.
  • Withdrawal of civil penalties coverage.

For full details on the insurance coverage, see the insurance policy for 2022-2023.

In the event of a discrepancy between the English and French versions of the insurance policy, the latter takes precedence.

Excess liability insurance coverage

Under the applicable Regulation respecting the practice of the chartered professional accountancy profession within a partnership or a joint-stock company, members who practice the CPA profession, as set out in the CPA Act, within a limited liability partnership (LLP) or joint-stock company (JSC) are required to take out excess liability insurance coverage for the partnership or joint-stock company to cover possible professional misconduct, in addition to basic compulsory professional liability insurance for all CPAs.

The members concerned must take out excess insurance with their preferred insurer, provided the coverage terms and conditions set out in the Regulation are met. To take out or renew excess insurance, CPAs must contact directly their insurance agent, broker or insurer, such as ACPAI Insurance.

Consult the section on practice within a partnership or a joint-stock company for more information on excess liability insurance coverage > 

Questions?

Need more details on the insurance coverage, the categories of insureds or how the Fonds d’assurance works? Contact us by email at assuranceresponsabilite@cpaquebec.ca.

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