Insurance for business needs.
A CPA's understanding of the scope of a business's activities, the properties owned and the client's risk tolerance also are important. Even armed with this knowledge, most CPAs ultimately will want to rely on business insurance experts and recommend the client engage an insurance broker or risk manager to see if there really is the potential for a loss and if coverage is appropriate.
Small businesses can retain independent risk managers to examine existing coverage and potential risks and make appropriate recommendations. Larger businesses typically have risk managers on staff but may turn to CPAs for help in analyzing the financial impact of potential risks.
Proper protection cannot be left to chance. By helping business owners evaluate some basic strategies, CPAs can make sure everything has been done to protect a business and its assets. Here are a few areas in which CPAs can help:
* Deciding what risk management technique works best and most economically. Commercial insurance is only one option; other methods, including loss prevention, self-insurance and risk transfer, can be used individually or together.
* Dealing with the largest potential exposure first. As the client's budget allows, other less severe exposures can be dealt with.
* Making proper use of policy deductibles to reduce premiums.
Buying the largest possible unit of insurance available. Insurers typically offer lower premiums when more property is insured on a single policy.
* Insuring the correct exposure. Coverage should extend to all necessary business areas.
* Taking full advantage of loss prevention services that may be offered by insurance companies or brokers.
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|Title Annotation:||Meeting Property and Casualty Insurance Needs|
|Author:||Fleming, Peter D.|
|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||Jan 1, 1996|
|Previous Article:||Individual's risk management.|
|Next Article:||Helping clients protect against risk.|