The number of options and factors to consider when choosing the right liability carrier can be overwhelming. This is especially true for those who are purchasing professional liability insurance for the first time. Before making a decision, it is important to consider multiple elements that may affect your coverage. The insurance carriers ratings, cost of premiums, benefits of each policy and even payment options are all things that can, and should, play a part in choosing the right professional liability carrier to protect you and your firm.
No two accountants are the same and the policies they need differentiate based on a multitude of factors. Below we have shared some tips on how to choose the right professional liability carrier that fits your needs.
Compare Policies
The first step for any accountant looking to purchase professional liability insurance is to compare policies. No two accountants are the same therefore the policies that protect them are not the same either. Finding the policy that fits you and your individual practice the best is crucial in protecting your firm.
When comparing policies, accountants should request a sample policy from different providers. Shopping around for different policies and rates is vital for accountants to understand the landscape of potential professional liability coverage around them. Keep notes, or even a spreadsheet of all of the different policy rates and what they entail to help yourself consider what fits your needs and budget.
Compare Premiums
Although price should not be the only concern, comparing premiums is an important factor to consider when looking at different policies. Purchasing the right amount of coverage to protect you in the case of a claim or lawsuit is vital, so be open to looking at different price points.
Price points should take premium increases into consideration as well. Premiums will increase when coverage is added and also if a claim is made.
When comparing premiums, it might be tempting to choose the lowest priced policy. Although the lowest priced policy looks tempting, it may not provide enough coverage or carry adequate benefits compared to other policies available. Carefully comparing premiums and policy benefits is an important step in deciding which carrier is best for you.
Compare the Added Policy Benefits
Comparing the policy as a whole is important, but looking at the additional policy benefits is an important distinction when choosing between two similar policies. Consider these possible questions when looking at added policy benefits.
- Is cyber insurance available?
- Does the policy include a free, unlimited extended reporting period upon an accountant’s retirement?
- What about supplemental coverage?
- Are additional costs associated with these benefits?
It is common for insurance carriers to include added benefits in their coverage options in an effort to stand out from their competition. Although benefits can be nice, some might not pertain to every accountant or accounting firm depending on specific areas of practice or other circumstances. This is why it is integral in determining which benefits matter most to you. Things you may want to consider are:
- Are you considering retirement in the near future? If so, you may want to consider policy options for continuing and ending coverage.
- Do you currently, or do you see yourself in the future, handling a lot of business through your website, email or utilizing legal software? Check for cyber coverage options.
Additional policy benefits could end up being a deal maker, or deal breaker depending on what you value. Be sure to take these benefits into consideration when looking at what liability carrier is right for you.
Compare AM Best Ratings
When looking at different carriers, looking at the AM Best ratings is a helpful tool to identify trustworthy carriers. Carriers with an “A” rating are insurers that perform at the top of the industry in creditworthiness. Creditworthiness is important because it determines the ability to repay creditors and pay any claims that are presented. Companies with a “C” or “D” grade are companies that are considered weak in creditworthiness. Ultimately this rating shows the company’s financial standing when compared to other competitors in the marketplace. The stronger the financial strength of the carrier, the more likely it is to continue flourishing without financial failure.
Compare Payment Options
As carriers and policies differentiate, so do payment options. Some professional liability insurance carriers might require an initial deposit or up-front payment of the annual premium. Another payment option is when the carrier will divide the premium into monthly or quarterly payments. This may make it easier to pay but consider that if you miss a payment, the carrier has the right to cancel your insurance policy.
When making a decision to purchase professional liability insurance, consider each of these elements for what best fits your needs. Choosing the right liability carrier might take some research but having the right coverage is a piece of mind that is worth the time.