Attorneys, Accountants Take New Paths, Encounter New Risks

The work environment for professionals has been evolving rapidly over the past few years, fueled by both the spread of technology and the changing economy. Many professionals, such as attorneys and accountants, are embracing new ways of doing business and expanding into new markets.

While the upside of being open to new opportunities is greater financial success, the downside may be exposure to unforeseen risks and unanticipated liabilities that are not covered by many existing insurance policies. The following offers three areas to explore with customers.

Expanding in New Directions

As the economy has dried up sources of revenue, professionals have sought new ways to offer their services to consumers. Accountants, for example, who once dealt mainly in tax preparation, may begin to provide financial planning, investment advice and other services that may not have the same clear-cut responsibilities and boundaries. Attorneys who have focused in the past on litigation may take a leadership role in professional circles, producing books or articles that provide advice or commentary.

As professionals move beyond their traditional roles, agents should encourage them to review their policies to ensure that coverage coincides with their new activities. A few examples to consider are:

• Publishing liability.Professional liability policies may limit coverage to the practice of a profession. If an attorney or an accountant publishes articles or posts blogs about professional matters, does their traditional professional liability policy provide coverage for liabilities that may arise, such as defamation, plagiarism or the unauthorized use of someone else’s ideas, even where no actual client is involved? Some professional liability policies may have a coverage gap in this area, but publishing liability coverage can address this exposure.
• Reputation management.With the intense scrutiny that today’s 24/7 media bring to many professions, a law or accountancy firm may want to protect itself from the costs of protecting or repairing its reputation in the event of a controversy. Reputation management or crisis response coverage can pay for public relations advice and effective outreach to address any crisis that emerges.
• Disciplinary complaints.Both attorneys and accountants are subject to the oversight of professional disciplinary boards. If a complaint is made against them, they may have to take time off from work, pay for defense costs and incur other expenses during any disciplinary process. Policies can be arranged to protect against the legal costs associated with responding to such complaints.

Using Cyber Tools

The use of technology, such as storing information in databases, communicating about clients through e-mails, and offering an interactive Web site for clients to access services, has become standard in many professions. While making offices more efficient, these cyber tools also open the door to liability.

Among the areas of protection that are offered by cyber liability insurance are:

• Spread of computer viruses.A firm that inadvertently spreads a virus to customers, which harms their systems, can be held liable for their clients’ resulting damages.
• Denial of access.Lawyers and accountants may provide some of their services online or electronically. There may be damages if their clients or other authorized users are unable to access the Web site due to an outage.
• Violation of privacy laws.Private information can be disclosed inappropriately in a number of ways.

Dabbling in Social Media

With the rapid growth of social media platforms, such as Facebook, Twitter and YouTube, professional firms have found “going viral” an attractive way to spread the word about their services. However, social media also exposes professionals to potential liability. There are at least three areas of risk to firms that should be examined by agents and their customers:

1. Exposure of the professional firm to legal liability for defamation, harassment, privacy violations and other possible claims because of postings by employees.
2. Leaking of proprietary information or trade secrets that may decrease a firm’s ability to be competitive.
3. Damage to the firm’s reputation through false, disparaging or reckless communications by employees or outsiders.

Staying Abreast of Changes

As attorneys and accountants take advantage of technology and offer services that their predecessors never considered, the risks they are exposed to have increased as well. By making sure the coverage for these professionals keeps pace with changes, agents and brokers can become valued partners, offering insight into liabilities and expertise on the appropriate level of protection.

Topics Professional Liability