Finance Accounting Business Insurance

A small finance company's financial standing could be damaged due to embezzlement, data breach, or unforeseen accidents. Business insurance can help finance professionals recover from such financial obligations.

Accounting insurance is a particular sort of insurance aimed at mitigating managerial risk brought on by the unique dangers that financing organizations typically face. Other names for this insurance are:

• Certified public accountant (CPA) Insurance
• Accountant Insurance

Accountants and CPAs are typically tasked with managing sensitive information for their customers, a job that poses potential security risks. Insurance for your financial planning business can help you avert threats so you can operate a profitable company.

Your accounting insurance premium will vary due to the multitude of underwriting data points that insurance companies use to determine your rate and annual premium. This can include your accounting firm’s:

• Revenue
• Types of Clients
• Claims history
• Location-assets insured
• Payroll
• Type of work performed

First and foremost, for professional errors, omissions, or negligence, Professional Liability is a requirement for accounting operations. You and your employees are handling your client’s finances in one way or another. Mistakes happen, especially working with numbers. While general liability will protect the firm from physical property damage or bodily injury, Errors & Omissions insurance protects you for negligence that causes your clients’ a monetary loss which is never covered under General Liability.

Many accounting firms next obtain a Business Owner's Policy (BOP) for their insurance coverage needs. Offered by most insurance agencies, this policy covers third-party property damage and bodily injury liability as well as commercial property insurance coverage for your owned property, buildings, contents, and equipment.

A BOP offers three distinct kinds of insurance coverage for small business owners, such as:

• General liability insurance
• Commercial property insurance
• Business income insurance

General Liability Insurance

Also known as commercial general liability insurance, general liability insurance (GL) protects the business for its negligence in causing someone injury or damaging their property in the normal course of business operations. For covered claims, the insurance carrier will provide your legal defense so you don’t need to get your own attorney or incur court fees. Protection from general liability claims is a must-have; without it, you essentially would have to pay expenses out of pocket for claimants’ losses.

Four ways General Liability insurance can defend your business:

Bodily Injury

Your company's insurance policy will defend you if someone makes a claim against you or sues you for their financial loss caused by a bodily injury in which your business was liable. The injured party may be entitled to reimbursement of all medical care they received, replacement services (if they are unable to drive or clean the house), their pain and suffering, and economical loss from them missing work in the event they hurt themselves because of your negligence.

This coverage applies at your business location or while performing work on a job site.

Property Damage

Employees might drop or damage a customer's property or products while completing a job for a customer. Your General Liability policy can cover damage to the property of others caused by negligent actions of your employees while performing work.

Personal and Advertising Injury

The general liability insurance policy includes limited coverage for injuries that do not include physical bodily harm. Think of hurting someone’s feelings or disregarding their civil rights. If your business is accused of false arrest, invasion of privacy, wrongful detention, defamation of character, libel, wrongful eviction, slander, and accidental copyright infringement, this coverage is what will step in to defend and pay claims for which you are liable under the policy.

Damage to premises rented to you

Your liability insurance provides some limited coverage for the rental property you occupy, for fire legal liability. Though this limit is usually included at a $50,000-$100,000 limit, it usually can be increased for an additional premium. This coverage can pay the property owner for fire if you or your employees were negligent and that negligence caused the fire which damaged the building.

Commercial Property Insurance

Property insurance protects your owned property, including your building and any building improvements made if you rent space, the contents, furniture, fixtures, computers, printers, scanners, and any other tools and devices you use to run your organization. It covers losses from many sources, such as:

• Fire
• Burglary
• Theft
• Wind
• Lightning
• Riots or Civil Commotion
• Tornados
• Explosion
• Sinkhole or Catastrophic Collapse

Business Interruption also referred to as Business Income insurance, will replace your net loss of income if your building is damaged by a covered peril making the building uninhabitable, making it impossible to continue your normal operations.

Commercial property insurance can help in the following loss scenarios:

• A fire burns the building and destroys your contents
• Lightning strikes the building and damages all your electronic equipment
• Someone breaks into your building and steals your computers

Know that your commercial property insurance does not cover every type of property damage. This insurance won't cover your business if:

• Flood (almost always will be a separate policy)
• Cybercrime loss
• Automobiles, Boats
• Earthquake (may be endorsed on or separate policy)
• Nuclear damage, War
• Intangible assets (intellectual property)
• Intentional damage

Business Income Insurance

Business Income insurance is a type of property insurance that makes it easier for your business to replace lost revenue if it loses money due to covered property damage to the building. For example, if you accidentally suffer fire damage that prevents you from operating your business and generating revenue this insurance pays your net lost income until your business can resume normal operations. This coverage allows you to pay your ongoing operating costs:

• Mortgage or rent payments
• Employee’s wages and payroll (if opted to include ordinary payroll)
• Loan payments
• Tax payments

Business Income Coverage Exclusions

Business income insurance does not cover property damage. It compensates you for your loss of revenue during repairs or rebuilding of the structure. For example, you will need property insurance to pay the costs of repairing your office building. Business income insurance does not cover your expenses for losing income from epidemics, viral, bacterial, or otherwise. The building must first be damaged by a covered peril that necessitates closure.

Restoration Period

The business recovery period for business interruption insurance starts when the physical building is damaged and forces you to cease operations. It concludes once your business resumes normal operations.

Cyber insurance

Cyber insurance is very customizable in that it can provide first-party coverage which is the loss suffered by your business resulting from cybercrime, think of lost income from a denial-of-service attack or physical damage to your electronics, computers, servers, networks, etc.

Third-party cyber liability is also included in a Cyber policy, it protects accountants, auditors, and other financial professionals from liability when there is data loss or a cyber-attack involving your client’s data in your systems. If your clients are a victim of identity theft resulting from a hack into your systems, your business can be held liable. This insurance policy can cover your business’ loss and the liability claims and suits from clients for reputational harm, economic losses, legal fees, and court expenses.

This policy provides liability coverage related to:

• Ransomware/extortion
• Denial-of-Service loss
• Data breach liability lawsuits
• Breach notification expenses
• Fraud monitoring costs
• Public relations and crisis management cost
• Forensic investigations

Fidelity bonds

Fidelity bonds may be referred to as different things but in the end, the coverage they provide is similar. Employee Dishonesty, Fidelity Bond or Crime, are broad insurance categories that can be related.

Your employees handle financial information every day, so a fidelity bond (aka Employee Dishonesty coverage) is crucial to your business. Money that was misappropriated by one of your employee’s criminal act, would be reimbursed by the bonding company when proven and the employee convicted. The bonding company then will prosecute the employee to collect restitution for payment they made to your business.

If someone steals from a customer, a third-party fidelity bond (Crime coverage) will reimburse your customer for the amount of money the employee stole.

This policy also can provide coverage related to:

• Employee theft, fraud
• Fraudulent electronic funds transfer
• Unlawful data access
• Computer fraud
• Forgery, alterations, and counterfeit money

It is also called commercial crime insurance or employee dishonesty coverage.