Professional/Business Service Providers

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Professional/Business Service Providers

As a professional service firm, ICA understands the need for a professional service provider to maintain its excellent reputation. This understanding is due to ICA’s core resource: a talented pool of professionals with experience from various legal, accounting, financial and consulting backgrounds to speak the appropriate industry language and provide the required level of service demanded. Therefore, ICA’s consultants put the due care and sense of ownership in every service provided to its professional clientele, as if ICA were the actual client. From sole proprietors and family offices, to prominent law firms, accounting firms, medical service providers and other professional service providers that include the associations that they belong to, ICA proactively identifies and assesses our Clients’ risks associated with services they provide as well as their business activities to the public.

It is very important for a Professional Services Organization to maintain the broadest and most relevant insurance coverage in order for that organization to stay in business. Failure to obtain cost-effective insurance coverage as well as coverage that does not transfer the appropriate risk to the insurance company could potentially bring about a professional service firm’s downfall or not allow it to continue in business. Therefore, it is imperative that every aspect of the professional service firm’s operation be identified and properly communicated to the insurance company in order to obtain the relevant and necessary coverage needed by their firm for all the services they perform. See our Risk Management And Insurance Coverage Analysis.

A Professional Liability insurance policy and its application for coverage, for all intents and purposes, are part of the same document and should be viewed in that regard. The application for insurance coverage (at the time of a loss) is not only dependent upon the insurance coverage contained in the policy, but sometimes more importantly, the disclosure of information, or not, in the application itself, which forms part of the insurance policy. Furthermore, these professional liability policies should be written for the specific services performed that a law firm faces, which are different from those of a financial advisor, medical provider or other service provider. In this regard, the insurance policy application requests information from the professional service provider that is relative to their performance of their services, and should the service provider not fully disclose the services afforded — that would ensure the proper insurance coverage — the likelihood is that those coverages needed will not be addressed or covered by the insurance company at the time of a claim. Therefore, the application process and disclosure of information, which typically requires supplementary information to be communicated to the insurance company, is a must and at the heart of many coverage disputes or denials between the professional service provider and its insurance carrier. In that these professionals might be surprised to learn that their activities might unknowingly be creating an unrealized exposure to strict or fiduciary liabilities, if inadequately protected against, it is most likely as a result of the aforementioned as well as the fact that their professional and personal liability may be inescapably linked, thus holding these professionals personally liable.

Overall, decision makers of Professional Service firms do their best to exercise a high degree of care, as their profession requires, to their clients or patients. However, sometimes the pressures of performing their services cause professionals to reduce the quality of their services. Furthermore, downward pressure on pricing posed by competitors or others in the Professional Service Industry at large may also create a need to adapt to implementing cost-efficient processes that if improperly applied, could well result in bodily injury, personal injury or advertising injury depending on the firm’s advertising practices. The risk management budget should include analyzing the impact of the above strategies or business implications and their consequences in order to protect the professional service firm and transfer liability wherever possible to its appropriate third party others or insurance carriers. 

Trending exposures facing all types of providers of professional services, whether the provider operates in the legal, financial advisory, medical practitioner or other specialty service sector, includes a changing workforce landscape that indicates a potentially significant skills gap, whereby failure to hire and train properly could result in an Errors and Omissions claim or an unexpected business interruption loss. Take, for example, the following key exposures that must be taken into serious consideration while focusing on growing a firm’s practice: loss of key personnel due to retirement, injury, death or migration to a competitor; employment-related risks and clearly communicated procedures to reduce the chance of personal injury losses; understanding areas of liability the business accepts when hiring contractors or outside personnel to service the business; company outings and community-service-specific exposures. 

Other exposures that also potentially face all professional service providers include the following: the risks of implementing artificial intelligence to solve complex problems, or to perform routine functions, including data aggregation and advertising processes; failure to perform adequate penetration testing and systems performance analysis to mitigate cyber losses; maintaining compliance per regulatory bodies’ requirements and changes in law; first-party property losses that may prevent access to office locations with critical data or files necessary to serve the organization’s clients; auto liability exposures related to the organization’s vehicle use policy (or lack thereof) as well as potential business interruption, extra expense and back-up location costs applicable to some of the above scenarios, to name a few.

A real-life example of the above is the following: Your endodontist is performing a root canal procedure and does not have a generator during a hurricane / windstorm, and their office loses power. Be prepared to use pain killers for the next few days until you can be called back into the office when power is restored to complete the procedure. Lesson learned: ask any medical provider before the commencement of any medical or dental procedure if the location where the services are being performed has a back-up generator (or other power resources) to complete the procedure before they perform their services should a power surge occur, especially if there is an imminent storm or medical emergency.

ICA’s consulting experience and unique insight has proven to be invaluable to the decision makers and providers of our Clients who are professional service organizations. Apart from the professional services that ICA provides on an ongoing basis to Clients in this industry, ICA is constantly recognized for the risk identification and subsequent recommendations provided to its Clients that include noninsurance-specific matters, which they may face based on their professional engagements or activities or assumption of liability in the contracts they enter into. See our Contractual Risk Assessment Services. Understanding the services these Clients provide, the roles they play and especially the nuances associated with these Clients is critical to developing the most optimal risk management and risk transfer solutions. Again, this is due to ICA’s core resource of talented professionals from consulting backgrounds that speak the appropriate industry language and provide the required level of service demanded. ICA strives to catch the minute details of our Client’s professional practice necessary and proper to form a comprehensive risk management program, thus providing exceptional service that outperforms the competition.

The following testimonial exemplifies ICA’s value provided to one of its Professional Service clients:

“As in the past, you dealt with our current crises as you always do in an efficient and effortless manner… we have been doing business with your company for over 10 years. In all my years’ experience in dealing with other companies, I have yet to come across a company that is as efficient, courteous and accommodating as ICA has been in handling our Risk Management Program Audit.” – Professional Services Industry Client

Contact ICA for a comprehensive list of client references.

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