Academic journal article Journal of Accountancy

Insurance for Business Needs

Academic journal article Journal of Accountancy

Insurance for Business Needs

Article excerpt

A CPA's knowledge of a client's business affairs is key in evaluating the business's insurance needs. This includes coverage suggested by the form of business (such as partnership or corporation) or by product line. It can even be as specialized as the credit and political risk insurance coverage described on page 66.

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. …

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