Accountancy Profession Act (Cap. 281), article 11

11. (1) Every firm formed under article 10 and every warrant holder or a holder of a practising certificate, shall, for so l ong as they hold such a warrant or practising certificate or, as the c ase may require, for so long as they are so formed, and thereafter with respect to anything done or omitted during that time, be covere d by an indemnity insurance, by such company, in such manner and for such amount as may be prescribed in regulations made by the Minister under this Act, against any liability which such perso n or firm may incur for compensation in respect of any loss or damag e which a client or any other person may suffer as a result of an y negligent act, error or omission committed by any such person o r firm, or any principal thereof, or by any of their employees, i n the carrying out of their functions as well as against any claim in respect of any loss or damage brought about or contributed by any dishonest, fraudulent, criminal or malicious act or omission of any of their employees. (2) ( a) The indemnity insurance referred to in subarticle (1) shall also extend to cover claims in respect of loss or damage made in the five years immediately following the cessation of the policy as a result of the retirement of or the surrender of the warrant or practising certificate by any principal and provided that the negligent act, error or omission giving rise to the claim had occurred during the period of insurance of the policy. (b) In the event that an insurance policy is transferred from one insurer to another, the new policy shall extend to indemnify the assured against any loss or claim made against the assured in respect of any negligent act, error or omission which has occurred, or is alleged to have occurred, prior to the inception of the new policy, provided that the assured is unaware of 22 CAP. 281.] ACCOUNTANCY PROFESSION such loss or claim at the time of completing the new policy, and such loss or claim has not been notified under any other policy attaching prior to the inception of the new policy. (3) ( a) The requirement of an indemnity insurance under this article shall not apply to any person who is a warrant holder or a holder of a practising certificate in respect of any year in which he has not exercised the profession of accountant or auditor and who has before the commencement of such year informed the Board in writing that during that year he will not be exercising the profession of accountant or auditor. (b) The provisions of paragraph ( a) shall not be construed as exempting any person from the obligation to be covered by an indemnity insurance for the further period of five years immediately following any year in which he so exercised such profession. (c) For the purpose of this subarticle any warrant holder or a holder of a practising certificate who in any year - (i) does not in any manner exercise the said profession; or (ii) exercises the said profession as an employee of the Government or of a body corporate established by law, or of another person, or of a firm, in respect only of the exercise of such profession in the course of his duties during such employment, shall be exempted from the obligation to be covered by an indemnity insurance under subarticle (1). (4) Every person or firm bound to be covered by an indemnity insurance under this article shall each year, together with the annual return, inform the Board in writing of the name of the insurance company, the relative number of the insurance policy, provide documentary evidence from the insurance company that such person or firm is actually covered by the identified policy of insurance, and shall declare to the Board that such level of insurance cover amounts to not less than such minimum levelas may be prescribed in regulations made by the Minister under this Act. (5) Every person who fails to comply with any of the foregoing provisions of this article shall be guilty of an offence and sh all be liable on conviction for each offence to a fine ( multa ) not exceeding six thousand euro (€6,000.00), or to imprisonment for a period not exceeding three months, or to both such fine and imprisonment, and in the case of a continuing offence to an additional fine not exceeding six hundred euro (€600.00) for each day during which the offence continues. ACCOUNTANCY PROFESSION [CAP. 281. 23 Breach of professional duty. Substituted by: XIV . 2003.11; IX. 2008.56. Amended by: XXIII. 2009.36.