SOURCE: Insureon


June 12, 2012 09:00 ET

Small Accounting Firms Gain New Risk-Management Options From Insureon

Online Insurance Agent Now Offers Business Insurance to Help Accountants Strengthen Succession Plans, Reduce Online Filing Risks

CHICAGO, IL--(Marketwire - Jun 12, 2012) - Small accounting firms and independent Certified Public Accountants (CPAs) are facing increased business risks as a result of increased merger and acquisition (M&A) activity and the growth in online filing and paperless offices. These new risks are driving firms to buy specialized accounting insurance, according to insureon, the leading online agent for small business insurance.

The Journal of Accountancy notes that M&A in CPA firms is driven by an ageing partner workforce, unfunded partner retirement obligations and a scarcity of younger workers to refill their ranks. This is a particular problem in small CPA firms, which make up the vast majority of overall firms according to the American Institute of CPAs (AICPA). Small and micro accounting firms with less than 20 staff are more likely to obtain enhanced value in M&A with a history of responsible business practices -- including an effective risk management strategy that includes appropriate business and professional liability insurance.

"A comprehensive review of business insurance has become a necessary part of succession planning for many small accounting firms that are looking ahead to a possible merger, even if it may be years down the line," said Ted Devine, chief executive officer of insureon. "This is an area where firms will find value in seeking insight from an outside expert in insurance and risk management. Insureon's licensed insurance agents can work with small accounting firms to ensure that they have all the coverage they need to protect their businesses and position themselves for maximum valuation."

The second trend is the business of accounting's dramatic leap toward online filings and paperless processes. While this has been a boon to productivity and the environment, it opens the door to a new set of risks related to the security of clients' confidential information.

"Accountants have always had the weight and responsibility of their clients' financial records on their shoulders," Devine said. "Now that so much of their business is conducted electronically, clients' sensitive information is vulnerable in entirely new ways. At insureon, we help accounting firms find affordable protection against unknowns like accidental data loss, theft of client information, and even computer viruses."

Carrying appropriate business insurance is an important part of risk management for any accounting firm. Insureon provides affordable insurance products to protect firms from what AM Best has identified as the top five risks faced by accounting firms:

  • Professional Liability - Accountants must not only know the intricacies of the tax code, they must also deeply understand their clients and their businesses, never miss deadlines, and be prepared to answer for every decision they make. Some open themselves to further liability by testifying as expert witnesses, providing financial advice, or serving in an auditing capacity. As federal regulations raise the bar for the accounting profession, more accountants are seeing the wisdom in purchasing professional liability insurance to protect themselves from lawsuits arising from the advice they give -- or fail to give.
  • Property Insurance (Inland Marine) - Careful, thorough recordkeeping is essential to any accounting firm, no matter the size. However, sensitive documents and electronic files are vulnerable to theft, power surges, fire and other causes of loss. Accountants can limit exposure to these threats with valuable-papers and records coverage, as well as coverage for the computer systems that house them.
  • Cyber Liability - As accounting businesses increasingly move toward paperless processes and online filing, they take on the responsibility of keeping clients' sensitive data secure. Cyber liability insurance protects accounting firms against losses related to theft or disclosure of confidential client data, as well as the introduction of malicious code or viruses.
  • Fidelity Bond/Employee Dishonesty - Sensitive information at accountants' offices may present a temptation for some employees, and background checks cannot always predict an employee's trustworthiness. Firms can protect against employee dishonesty with coverage that safeguards cash on hand, as well as clients' personally identifying information, bank account details, and credit card information.
  • Fire and Extended Property Coverage - Fire, smoke and water can spell disaster for documents, computers, office furnishings and other equipment. Storing files electronically and backing them up off-site can reduce exposure to potential risks, and property insurance is a wise investment that is often required to lease office space.

Accountants who choose insureon as their online insurance agent gain access to the nation's most respected, A-rated business insurance carriers, as well as licensed insurance agents trained to identify the best possible insurance for their needs. For more information, visit insureon's small-business insurance agency, Business Insurance Now.

About Insureon

Insureon, the leading online business insurance agency for small business, specializes in serving the fast-growing micro-business sector, which includes the self-employed and companies with 10 or fewer employees. Insureon allows small businesses to apply online for insurance and receive multiple quotes from leading insurance carriers -- completing in minutes a process that otherwise would take a week or longer. For more information, please visit insureon sites TechInsurance and Business Insurance Now.

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