Insurance for Professional Services Industry

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Overview

Professional services are occupations in the tertiary sector of the economy requiring special training in the arts or sciences. Some professional services require holding professional licenses such as accountants, architects, lawyers, engineers, and doctors. Other professional services involve providing specialist business support to businesses of all sizes and in all sectors which can include tax advice, supporting a company with IT services or providing management advice.

We can break “Professional Service Firms” (PSF) into three groups:

  1. Classic PSFs (e.g., law and accounting firms): high knowledge intensity, professionalized workforce, low capital intensity
  2. Neo-PSFs (e.g., management consultants): high knowledge intensity and low capital intensity
  3. Professional Campuses (e.g., hospitals): high knowledge intensity, professionalized workforce, high capital intensity

The US and European Union are the largest markets for professional services but firms are expanding in emerging markets in China and India. The US professional services industry includes about 900,000 single location and multi location firms with a combined revenue of roughly $1.7 trillion.

Why is Insurance for Professional Services Organizations Important?

Lawsuits from customers or other parties financially harmed by the performance of (or failure to perform) services are the most significant threat to Professional Service Companies.

Any one of a company’s clients can claim financial loss, including:

  • those who sue their accountants after being audited by the IRS after inadvertently underpaying their taxes
  • those who sue their lawyers for failing to competently represent them in court
  • the patients who sue the company who ran the clinical trial in which he or she participated and was subsequently injured
  • the developers who sue their architects after the city forces them to halt construction due to zoning restrictions
  • the data warehousing company who sues their cyber security consultants after hackers exploit an unforeseen weakness in the new system

Cyber and privacy liability is critical, as well. By their nature, many PSFs collect sensitive data including PII or interact in some way with their clients’ network or systems. If data is compromised or hackers get to a client through you, your liability could be massive.

Legal Liability

Legal liability and the potential for lawsuits is among the top concerns facing professional services companies. These risks include professional liability, such as errors and omissions and other professional mistakes. 19% of professional services firms said they worry about customer slips, trips, and falls.

Data Breaches

The most common cyber risks among professional services businesses are security breaches and their computers being damaged or going down. Professional services firms also face professional liability risks from cyber attacks. 62% of professional services firms cite cyber risk as their top risk.

Driving Accidents

Driving accidents caused by employees who use their own vehicles for work may lead to legal liability. 71% of professional services companies report that they use personal vehicles for company business but only 41% report that have commercial auto coverage as part of their insurance.

Cybersecurity

The theft of customers’ personal info — or worse yet, their financial info — is a looming threat for online retailers. Bad actors can wreak havoc by stealing data, encrypting your data and extorting you, or shutting you down with a DDoS attack. These challenges can cause lasting damage to a company who isn’t prepared to face them.

Types of Professional Services Companies that need insurance

  • Legal
  • Marketing
  • Accounting
  • Tax
  • Architecture or engineering
  • IT services
  • Design
  • Writing

Professional Services Frequently Asked Questions

The cost of insurance for professional services companies will depend on several things, including the company’s size and development stage. Other factors include:

  • Exposures: risks being insured
  • Company practices: views on safety, compliance, and risk management
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company

How it works

Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

Jonathan Selby, General Manager

Meet your specialist

Jonathan spent the first 5 years of his professional insurance career working as a generalist broker at a traditional firm on Long Island.  Intrigued by the notion of how technology can be leveraged in the industry, Jonathan joined the Founder Shield team in early 2016 as an Account Executive, and quickly grew into his current leadership role of General Manager.  He works to oversee client strategy and communication, and has fostered a culture of providing unparalleled service and risk consulting for some of the fastest growing companies in the world.

 

Outside of work, Jonathan can be found on the basketball court and chess board (…but not at the same time.)

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