How to Reduce Your Liability Risk in Business Valuations Reviewed by Momizat on . Business valuation (BV) liability claims are not as frequent compared to other litigation risks faced by practitioners. On the other hand, there are BV-related Business valuation (BV) liability claims are not as frequent compared to other litigation risks faced by practitioners. On the other hand, there are BV-related Rating: 0
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How to Reduce Your Liability Risk in Business Valuations

Risk_ManagementBusiness valuation (BV) liability claims are not as frequent compared to other litigation risks faced by practitioners. On the other hand, there are BV-related liability claims that exist, especially in cases where a valuation report was used to guide financial decisions by businesses, lending services, regulatory agencies, and others, according to Frank Vinluan, in the January 21 issue of FVS News.

 

One of the best ways valuators can reduce their risk of a lawsuit starts with the engagement letter. Engagement letters can help limit a valuator’s exposure by clearly establishing the expectations of work to be performed, the purpose of the valuation, and the standard of value to be used.

 

Engagement letters can also establish a framework for dispute resolution—if a problem arises.  For instance, an engagement letter can indicate that in the event of a dispute, the parties must attempt to resolve the issue through mediation or arbitration.

 

To learn more tips for reducing professional liability risk, click here.

 

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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©2017 NACVA and the Consultants' Training Institute • (800) 677-2009 • 5217 South State Street, Suite 400 Salt Lake City, UT USA 84107

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