As the owner of an accounting firm, you can get so focused on your client's finances, tax returns, and investments that you don't spend enough time thinking about your own firm's financial risk management. You might not have a plan in place to…
- Reduce the risk of lawsuits.
- Protect against property loss.
- Prepare for other unforeseeable events.
That's why many accountants invest in small business insurance. Often a requirement for contracts, accountant insurance will also cover some of your biggest risks exposures, including…
- Client lawsuits.
- Office fires.
- Slip-and-fall injuries.
Keep reading to learn how you can reduce your firm's top five risks and cover your financial losses.
The Top 5 Risks for Accountants and Financial Advisers
As an accountant or financial adviser, you know that risks abound in your work. For instance, you could be sued for professional mistakes like ledger errors or failing to catch fraud. But you also face basic business risks. Slip-and-fall accidents and workplace injuries could leave your business burdened with medical and legal bills.
To help you craft a risk management plan, let's look at your five top risks and what you can do minimize your risk exposure.
#1: Data breach.
If your computers are hacked, data is leaked online, or you lose a laptop, your business could be liable for the loss of confidential and protected information. Even if your business has a firewall and secure software, a careless mistake by an employee could accidentally expose a client's confidential information. Cyber Liability Insurance can cover the cost of data breaches, helping you pay for IT repairs, crisis management, and credit monitoring for affected clients.
#2: Repetitive motion injury.
Repetitive motion injury.
From sitting at their desk or hammering away at the keyboard, employees can develop carpal tunnel or other repetitive motion injuries. While your accounting firm or finance company isn't exposed to extreme workplace hazards, common employee injuries like falls, back injuries, and repetitive stress injuries could lead to expensive medical bills and legal costs. Many accounting firms must have Workers' Compensation Insurance, so check your state Workers' Comp laws to learn more about your requirements.
#3: Client lawsuits.
Inaccurate tax returns, bad investment advice, or other mistakes could lead to a professional liability lawsuit. Finance professionals could be sued for these errors and the losses their clients suffer as a result. According to Accounting Web, 11 percent of all accounting malpractice lawsuits come from mistakes in bookkeeping and miscommunications with clients about their expectations for your work. Professional Liability Insurance (also known as Errors and Omissions Insurance) protects you from the cost of these client lawsuits. Even if a client unfairly blames you, E&O Insurance can cover the cost of defense for your firm and pay damages to the client.
#4: Client injury.
Client injury or slip-and-fall injury.
Say a client visits your office, but trips over a power cord and breaks her hip. Your business could be liable for treatment costs, physical therapy, and pain and suffering your client endures. General Liability Insurance protects you from these costs if face a third-party injury lawsuit. Many General Liability policies also have coverage that will pay for a client's immediate medical costs. If someone is injured on your property, your insurance will cover their ambulance and medical care, potentially preventing a lawsuit.
#5: Property damage.
A fire at your business could cost thousands in repairs and lost income. Whether you work from home or rent a commercial office space, Property Insurance can reimburse your business for losses due to fire, theft, vandalism, and certain weather events. Property Insurance covers the items your accounting firm owns, including computers, office furniture, supplies, and even the old-fashioned printing calculators you never use.
Work with Experts in Finance and Accounting Insurance
Having helped thousands of accountants, tax preparers, and financial advisers find the right insurance, insureon can help you get small business insurance that actually protects you from your industry's biggest risks. Contact an insureon agent today and get free insurance quotes custom tailored for your small business.