Why business needs insurance: an overview of insurance products

We don’t think about insurance until some unforeseen situation happens. But it is better to be prepared for anything in advance than to bite your elbows and look for ways out. Today we will talk about business insurance: what kinds of insurance there are, what kind of policy is worth buying, and what kind of program you can hook up to avoid business and other risks.

Insurance for companies providing accounting services

Finance loves order. If something is missed, an organization can suffer not only serious financial losses, but also get in trouble with the tax authorities. Now more and more organizations outsource their financial and accounting issues to qualified accounting professionals. But everybody can make mistakes.

Modern outsourcing and consulting companies choose to insure their risks. It allows you to provide yourself with additional protection for professional actions, to get an important point in increasing the reliability rating of your services. Therefore, it is worth checking the availability of such insurance coverage even before concluding a service contract with an outsourcing organization.

With the help of insurance, the outsourcing company is protected before its clients (customers and other persons) from possible cases:

  • Unforeseen (unintentional, accidental) errors in the preparation of documents, production and restoration of accounting, tax calculations, payroll, personnel matters, written consultations, etc.
  • Damage or loss of customer documents.

Business Insurance

Insurance for the audit organization

The work of the auditor determines how the organization, for which the audit report is being prepared, will operate and develop. During the audit of the financial state of the organization, the auditor evaluates the actions of the company, provides recommendations for the elimination of deficiencies in the work and further development of business, and in some cases, can save the organization from risky actions and financial collapse.

Therefore, the risks of the auditor may arise due to mistakes in checking the accounting and tax accounting, declarations, setting up and restoring the accounting, incorrect consulting and recommendations.

In order to protect both your work and business of the client (customer) from significant financial and reputational losses, it is simply necessary to have liability insurance when carrying out auditing activities.

The insurance may compensate for the losses incurred by the client in auditing services, including loss of profit, additional expenses, and funds spent on the defense of the auditor in judicial proceedings, if the case is solved in court.

If you are a private auditor or the owner (manager) of an auditing company, consider the issue of insurance – the insurance premiums for such a policy are much lower than the costs you may incur in case of an error, and clients are more loyal to organizations that provide a guarantee for possible losses.

If you are an audit customer, pay attention not only to the auditor’s reputation and membership in a self-regulating organization (without it the company has no right to audit), but also to the availability of guarantees and liabilities for reimbursement of losses in case of auditor’s errors, including through the mechanism of insurance.

Property and Tenant Liability Insurance

It is not always the case that the property (storage or residential space, retail space, offices) is owned, often the necessary space is simply rented.

This is especially convenient if the space is needed for a limited period of time. For example, a large batch of goods comes in, which will be sold to a buyer under a state contract in small batches. Usually the company does not store the goods, but immediately sends them to customers, so it has to rent a warehouse to store this batch, and once the contract is over, the lease will be terminated.

However, during the rental period of the premises, unforeseen situations can occur in which damage to the tenant’s or landlord’s property can occur:

  • Fire or flooding.
  • Natural disaster – hurricane, gale force wind, flooding, etc.
  • Theft of property, etc.

There are also insurance products for these cases. It is possible to insure the tenant’s civil liability to third parties, such as the landlord or other tenants in the neighborhood; as well as protect your property that is on the leased property.

There are also special types of insurance, such as tenant liability insurance for construction and installation work.

Usually, in order to insure a property, an insurance company representative has to go on site and inspect it, give an assessment of the risks. But now you can get detailed information about the building, its owners, its condition, etc. remotely, online, so the policy can also be taken out online.

This type of insurance is beneficial to both the landlord and the tenant:

  • The landlord will be able to rent with confidence and not be afraid of wrongdoing by the tenant.
  • The tenant will be free to leave his property in the rented premises and not be afraid that something will happen to it.

Directors Liability Insurance

Managing even a small company is a high degree of responsibility. Yes, this level of the career ladder is already filled with an impressive baggage of knowledge and experience, but the human factor should not be forgotten. You can make a mistake when choosing a contractor, or not agree a big deal with the founders in time, or decide to take too risky actions, which can bring the company losses.

If you are a director, liability insurance will protect you from expenses in case of losses of the company, claims from clients, employees or partners.

It does not mean that after insurance you can take risks and make mistakes left and right. Deliberate actions of a director that lead to losses, and even more so to bankruptcy, and violate the law, are not covered. An insured director should also act prudently and calculate his steps in advance.

Appraiser and appraisal company liability insurance

The mandatory availability of liability insurance policy for appraisers, as well as for appraisal companies, is no longer a novelty. By complying with the requirements of the law “On Appraisal Activities,” the appraisal community additionally provides itself with a guarantee and a rating of trust in front of its clients. Therefore, it is very important that the insurance policy you purchase fully complies not only with the legal requirements, but also guarantees the reimbursement of customers of appraisal services, in case the appraiser or appraisal company