Accountants — you are a straightforward bunch. You produce financial reports, review tax documents, and audit other accountant’s work. You are skilled at reading the minds of your clients, and we applaud you.
We’re going to show you a straightforward way to purchase insurance. One with drastically less paperwork and guesswork than you’ll need with any other brokers.
Change is a certainty in all industries
Instead of running from change, accounting firms have grabbed the bull by the horns. They have confronted ever-changing tax codes and a burgeoning global economy by expanding services, adopting technology head-on, and redefining their scope of services.
This re-engineering has created new opportunities, and with it, new risks. As accountants evolve, they become more exposed to the unsavory consequences of making errors. And when you do great work — such as give genius tax advice and navigate corporate finance — a lot can can go wrong to result in a claim.
Adequate protection from a claim, warranted or not, can help ensure financial security, success and longevity. Accounting firms, therefore, need to insulate with an impeccable risk management plan.
Finding the right coverage for your firm
It comes down to three factors:
- Premiums: what’s the cost for adequate coverage from your risks?
- Broker experience: how well do they know the legal industry and your specific needs?
- Time: how long will it take to secure and manage those policies?
Embroker is here to make purchasing insurance smart, easy and cost-effective for everyone. To get you started on the right path, let’s consider a few points before you rush off to bind coverage:
Did you know?
Tax-related activity is the leading cause of professional liability claims by frequency, but audit is the leading cause of severity.
You should already know this, but we just want to highlight that no one is completely insulated from risk. CPA firms get hit frequently with claims, despite holding themselves to the highest standards of professionalism and excellence.
Just the very nature of being a Certified Public Accountant exposes you to risk and malpractice claims. The world sees you as the financial “watchdog” who’s responsible for financial mishap. Defending your firm against a claim brings the added burden of lawyer fees, lost billable hours and precious energy consumed instead of serving your clients and growing your business.
An airtight professional liability policy eases the burden of a malpractice claim. The level of “airtightness” is almost always the direct result of working with a broker with specific expertise in your field.
In the accounting industry, professional judgment plays a significant factor in valuing inventory and assets. Accountants who lack the savvy on their client’s industry are more likely to make mistakes over complex tax laws, which results in low-quality advice. The same could be said about securing insurance for your firm.
Our brokers at Embroker have over ten years of experience servicing the accounting industry, from some of the largest firms in the country to main street advisors. Reach out to us now for a free consultation.
20% of malpractice claims related to auditing are the result of an accountant’s failure to detect fraud
While your engagement letter may waive the accountant’s responsibility to detect fraud — clients, investors, and history would say otherwise.
Businesses with high volumes of cash receipts, multiple entities, or those with poor internal controls are particularly susceptible to these schemes. They typically involve long-term employees stealing inventory or cash in increasing amounts over a long period of time, in sophisticated ways. The client often seeks recovery from the auditor once it discovers its insurance policy don’t fully cover the loss and that pursuing the embezzler through the courts may result in only a partial recovery.
Employee fraud and theft can occur at any company and at any time. What’s especially damaging and tragic is when the fraud happens at one of your firm’s clients. Crime exposure can turn quite serious, as accountants and their staff have access to sensitive client financial information like bank records and investment accounts. In recent years, this has been a larger contributor to claims for CPA firms (excluding Big 4) than Public Audit work.
Cyber Liability / Privacy endorsements are increasingly necessary
As clients add technology, your financial inputs and outputs become more complex. Most accounting entries are not manual entries anymore, but are the subject of multiple users from varying inputs such as (ominous) cloud technology. While most people think a privacy data breach is the result of a hacker tapping into their cloud, a high percentage of claims are actually the result of disgruntled employees, IT snafus, or stolen devices.
Sick and tired of paperwork?
Of course you are — you’re in the accounting industry. Probably hate it, right? Paperwork — all those mind-numbing forms, memos, calendars, contracts, applications — can consume or ruin your day... maybe even your life. And while you might possess a higher tolerance for client-serving paperwork, how many hours have you spent and/or lost on internal paperwork — including the insurance stuff?
We also hate paperwork at Embroker, and we’ve found a way to rid of some of it for you. Our online platform eliminates the burden of paper by turning all your insurance policies, certificates, claims, etc. into clean, easy-to-access digital documents. Kiss those file cabinet and papercuts goodbye.
Not sure if you’re getting a fair deal?
A frequent question we hear — and a common problem with insurance underwriting in general — is that no one is really knows how an underwriter arrives at a premium.
An accounting firm’s premiums are primarily determined by the number of employees, services offered (assurance, tax, consulting, etc), location, and claims. Most firms acknowledge this, but they still rarely understand how the price is actually derived.
Embroker believes in giving our clients better choices using data and transparency. We benchmark all of your policies against similar firms/accountants in your vertical, then procure multiple quotes from an independent broker. We also cross-reference your costs with firms of comparable size, policy limits, claims history, and risk tolerance.
Once set up on our platform, our tools and data ensure you’re adequately covered, even as market conditions change and your business grows.
Where would you like to start?
Accounting professionals like you require unique insuring expertise and experience. Embroker helps you get the best coverage at the best price, and we start a simple audit of your current policies. Beyond that, we also offer advice on risk management challenges such as loss control and risk financing.
Schedule a call with one of our brokers. It’s free and there’s no obligation.
First time buying insurance?
At minimum, accounting firms should purchase the following insurance: Professional Liability (aka Malpractice Insurance or / Errors & Omissions (E&O)) and Business Owner’s Policy (BOP).
- Professional Liability protects your firm and you personally from claims all malpractice, which are commonplace these days.
- BOP includes three basic insurance coverages: business liability, business property, and business income policies. It protects legal business much like the way a homeowner’s insurance policy protects a home and personal possessions.
As your accounting firm grows, you will eventually broaden your insurance program to include additional policies like cyber liability and an umbrella policy that extends the limits of existing coverage.
All firms are unique. We suggest you consult with one of our experienced brokers to find the right mix of coverage for your business.
Don’t wait around for right coverage for your firm. Take charge now and reach out to Embroker. We promise to make your next insurance experience smart, easy and cost-effective.