Experts recommend that most businesses – no matter how big or small – should have some form of insurance. Some specific industries are legally required to purchase business insurance to operate. Insurance acts as a form of protection against the unexpected.
Accountancy is one industry that isn’t necessarily legally required to purchase insurance, but it is in their best interest to take out a policy. This is because clients who decide to invest in accountants online or offline are essentially putting their financial future in the accountant’s hand; if anything was to go wrong here, accountants certainly need some form of protection. Continue reading to find out some more about the accountancy profession and why accountants should have insurance.
Risks posed with accountancy
An accountant’s primary role is to assume full responsibility for their client’s financial records. They can either work as an employee for an external company, work freelance or have their own accountancy business. Whichever way they work and whatever their employment circumstances are, there are always some risks posed with accountancy. Ultimately, an accountant’s skillset is very wide and generally consists of great attention to detail, understanding business operations, being computer literate, and having an abundance of analytical, communication and mathematical skills.
With that being said, an amalgamation of skills means that there are possible risks associated with the job. Some risks include and are not limited to general mistakes, infringing on intellectual property, defamation and sharing confidential information. Accountant insurance is the next step.
Insurance to consider
As a result of these risks, it is highly recommended that accountants invest in an all-encompassing insurance policy to protect them against claims surrounding the risks. If you’re an employee of an insurance company, then you do not need to concern yourself by taking out extra protection. This is because the company you work for should already have these insurance measures in place for your employment. However, if you’re a freelance accountant or a business owner, you should do as much research as possible and consider contacting an insurance provider to help you choose the right policy type.
Professional liability insurance – also known as professional indemnity insurance – is generally required for accountants to consider chartered work. This type of insurance is fundamentally required because it protects accountants if they are sued for general mistakes and negligence. The extent of cover required differs depending on what professional body you are operating within.
As well as professional liability insurance, there are also other types of insurance that business owners can consider while maintaining full protection whilst working. General business insurance is a great option as this acts as an umbrella insurance policy for different industries. This protects businesses against claims for injury and other types of damage for employees and clients.
As noted in this article, there are different types of insurance policies available for accountants. Freelancers and the self-employed should do as much research as possible to ensure their cover is appropriate to their role.