Exploring The Risks Of Not Having Errors And Omission Insurance Coverage

As an accountant in the greater Ontario area, you probably often find yourself dealing with 6 and 8 digit figures. However, as you know all too well just one little simple miscalculation on your part can throw the all the calculations off. A miscalculation could make it look like your client’s company has more money coming in than it actually does, which may eventually lead to overspending. While you are probably already familiar with business liability insurance, which protect you against property damage and bodily injury, you may not be familiar with error and omission insurance.

Error and omission insurance is also known as professional liability insurance. It covers public service providers, in the event that they make professional mistakes or accidentally overlook something. The above scenario is a perfect example of when professional liability insurance would come in handy. While error and omission insurance may seem more like a nuisance than a necessity at first, as an accountant this type of coverage can come in handy, and without it, you can potentially face dire consequences.

Facing Court Costs And Lawyer Fees

Error and omission insurance can be helpful, when you find yourself in a court of law disputing a claim. Even if your work is found up to par and all of your calculations were exact, just imagine all the time that would be spent in court disputing this claim. Sometimes these types of cases can last months and even years. The lawyer fees and court costs alone could cause any single-man operation or small company into bankruptcy. However, with the right errors & omissions insurance ontario policy, you wouldn’t have to worry about paying these fees, because the policy would cover all the court and lawyer costs, along with the settlement.

If you are found at fault, which sometimes happens, the policy will still cover your litigation fees, as well as the settlement costs. However, you need to keep in mind that the total judgment amount depends on how much coverage you have. If the total amount of the ligation fees and settlement exceeds your coverage limitations, you will have to end up paying out of pocket for the rest. So, not only is error and omissions insurance important, but the amount of coverage that you have is important, as well.

Damaged Reputation

Any type of claim, filed by a client or customer can ruin a company’s reputation. When a customer files a claim against a company, it can have negative effects and it does not matter if the claim is legitimate or frivolous. If the issue can be resolved with a few tweaks, it will be in the accountant’s best interest to resolve the issue as soon as possible. Of course, this is not always the case, because one minor calculation error could potentially cause a client to lose a lot of money. Most accountants will not have the funds on hand to cover the reimbursement cost, so the client will hire an attorney and file a lawsuit.

If the judge finds in favor of the complainant, the accountant will be left in a devastating mess. This finding will ruin the accountant’s reputation and potentially their business. Consumers will refuse to do business with an accounting firm that has a poor reputation. In fact, the court case and decision will probably end up in the local newspaper and on the local news network. It is extremely difficult to overcome such a tragedy, but not if you are covered with errors and omissions insurance.

Bankruptcy

When one thinks of a lawsuit, they do not give much thought to the litigation fees. The defendant in a lawsuit will need to hire the best lawyer they can afford. Of course, litigation fees are not cheap, but can run anywhere from $200 up to $1,000 an hour. This is money that most people do not have on hand. However, as a business owner, you will need to do whatever is necessary to hire the best attorney possible. When you combine the settlement, judgment and litigation fees together, this will be a large lump sum of money. If the accountant is not covered under an E&O insurance policy, they will be forced to pay these costs out of pocket.

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Learning All About The Surety Bond Market In Canada

An Introduction to bonding

Are you a Canadian resident, who wishes to open a business and start serving the public? If this is the case, you may very well be required to obtain a surety bond, before you’ll be able to move ahead. This is unfortunate for many Canadian citizens, since they’ll be completely unaware with the surety bond market within their home country. The good news is that surety bonds aren’t all that complicated, once you get to know them a little better. Below, you’ll be able to do just that.

What Are Surety Bonds?

There is often a misconception that surety bonds are a form of insurance. This simply isn’t true. Although they do work somewhat similarly to insurance, they’re technically different. So, what are surety bonds? Well, they’re a type of contract, which involves three parties. Within the arrangement, one parties is responsible for delivering a service to another. The provider is the principal, while the receiver is the obligee. And finally, the third party is the surety. The surety generally stays out of the way, unless a claim is made against the principal.

Major Players In The Market

Now, you should understand that it is possible to acquire surety bonds from several different companies or providers. In fact, the mass majority of Canadian insurance companies will also offer bonds. This is a good thing and slightly more convenient for many, but the experts recommend finding a provider, who is completely dedicated to surety products.  This is the case, because the latter will be more knowledgeable in regards to surety. They’ll be able to serve your needs better and will be able to guarantee that you find the lost price possible.

The PurposeGetting Surety bonded in Canada

There are many Canadians, who have used surety bonds for many years that still don’t understand their purpose. The truth of the matter is that there are numerous different types of surety bonds and each one will serve an individualistic purpose. In some situations, the bond will help to protect the public from fraudulent or devious companies. On the flip side, it is also possible for the bond to protect a singular group, company or event the federal or provincial government. Aside from offering protection, the bond will also serve the purpose of keeping professionals and companies on the straight and narrow and discouraging abuse.

Overall

Surety bonds are very complex in scope. However, when broken down into single products, they’re fairly simple and much easier to comprehend. By working with your surety provider, you’ll be able to better learn about your needs and your options. Be sure to do so, before handing over your money!

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How To Choose A Good Canadian Surety Company

Lets Begin and talk about Surety Companies

Surety bonds are an integral part of doing business these days. In fact, it is nearly impossible to do business in Canada without them, because law in most Canadian provinces requires them. If you are currently in business or going in to business, you are going to have to work with a surety company. This makes choosing a good reliable surety company imperative.

However, what most people do not understand is that when looking for a surety bond, they are going to be dealing with a broker or agent rather than the company. Purchasing a surety bond is much more than just going to a company and buying a bond. You are going to have to deal with a certain appointed individual on a regular basis.

There are so many different surety bond brokers and agents to choose from that the selection process can be daunting. How do you know which ones are good for you? Below, you will learn some important tips and information that will help you when it comes to choosing a surety bond broker or agent.

 

Easy Access

Before you even decide on a company, you are going to have to get various quotes. As a business owner, you are probably already pressed for time and do not want to play phone tag with a bunch of different companies. Look for a company that does the proper research and gets you a quote within a reasonable amount of time. Finding a broker or agent that is willing to contact you back in a timely manner is a good start.

 

Great Rates

You always want to make sure that the surety bond company is willing to work with you and not around you. The best brokers will have access to different insurance carriers. You always want to avoid getting Pick the best insurance surety companyinto business with a company that only deals with one insurance carrier, because you are probably not going to get the best rates. One way to avoid paying outrageous premiums is by acquiring quotes from several brokers. Just remember that the lowest cost broker isn’t always the best. To make sure you have a peace of mind, deal with a company like Economical Insurance. Not only are they repudiated, but they have also been around since 1871.

 

Track Record

When considering a company or broker, you always want to make sure that you do extensive research on them. Check to see how long they have been in business, and see what other customers have said about the services that they provide. Online reviews and business history can really tell you a whole lot about a company. It also never hurts to try to get in touch with some of their previous customers and personally speak to them. You can do this by requesting references from each broker.

 

Great Customer Service

While you are probably looking to get a quick quote, you still want to make sure that the people you are working with are trustworthy and will do everything they can to help you. Surety bonds can be a confusing business, especially if you are not familiar with them. Do not be afraid to ask the broker questions and later do research to see if he or she answered your questions truthfully and accurately.

 

Conclusion

As you can see, surety bonds are imperative when it comes to doing business. Making sure that you choose a good surety company will be the first step to success for your business. When choosing a company, make sure you apply the information you learned above, and you should be just fine.

 

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