Accountants, Insurance Providers, & Attorneys - When to Rely on Each for Your Business
As a business owner, it can be challenging to know which type of professional service provider you need to contact when handling specific issues. While attorneys, accountants, and business insurance providers can all help your business run more smoothly, each also plays a unique role in supporting your organization. It is crucial to have a trusted member of each group for your team.
Why Your Accountant is Important
In-house accountants are responsible for managing your business’ finances and assisting with tasks such as:
Establishing your accounting system
Managing financial documents
Auditing your books
Creating financial goals and evaluating progress
Reviewing business financials
Identifying tax deductions
Maintaining cash flow
Creating financial reports
Preparing tax returns
Identifying problems and ways to improve
Depending on your company’s size, the type of financial assistance you are looking for, and your business goals, you may find that retaining an outside accounting firm betters suits your needs. Accounting firms will assist with tax returns, as-needed analysis and advice, and financial statements, including balance sheets, income statements, and cash flows. However, they are typically not as involved in your company’s finances as an in-house accountant would be.
Accountants and attorneys often work together to ensure that your company structure and any equity grants you issue to employees or investors are structured in a way that is tax-favorable for all parties involved. A good collaborative relationship between your attorney and accountant is crucial for protecting your business interests.
How To Use Business Insurance Providers
No matter how small, every business should invest in business insurance to cover your obligations for potential property damage and liability claims. At a bare minimum, your business should invest in the following insurance coverages:
General Liability
Workers’ Compensation
Commercial Auto
Depending on your company’s needs, it may be wise to invest in additional types of business insurance as well. Each type of coverage offers protection against a particular kind of risk.
Common types of business insurance include:
General Liability Insurance, which covers the costs of accidents, injuries, and negligence, including the cost of legal representation in lawsuits against your business.
Professional Liability Insurance, or sometimes referred to as “errors and omissions” insurance, which protects professional service providers from liability for negligence or malpractice, stemming from performance of their professional duties.
Product Liability Insurance, which protects businesses that make and sell products, including manufacturers, wholesalers, distributors, and retailers, from liability for injuries caused by unsafe products.
Identity Theft Insurance, which is a type of liability coverage that protects businesses from expenses caused by a data breach, sometimes including the cost of notifying and providing identity monitoring services to customers who suffer identity theft due to the breach.
Property Insurance, which will reimburse your business for damage to or the destruction of its property caused by a fire, storm, or theft.
Vehicle Insurance, which covers the costs of damages to business vehicles or other vehicles caused by a company car.
Workers’ Compensation Insurance, which covers lost wages and medical care for employees who are injured at work. In most states, employers are legally required to obtain this coverage if they have a certain number of employees.
Business Interruption Insurance or “BI” insurance, which provides coverage for the costs of relocating your company and paying salaries and rent if you have to move or close down due to a fire or another similar event.
Umbrella Insurance, which are policies that protect your business against losses that exceed the coverage limits of your other insurance policies.
Attorneys and insurance agents often work together to ensure that your company is adequately covered and that you are in compliance with any insurance provisions in contracts in which you enter into.
How Attorneys Can Help Your Business
Partnering with the right business attorney can help your business grow, save you money, and ensure that you comply with applicable laws. A knowledgeable lawyer can provide valuable support in many areas, including:
Deciding the best type of legal entity when forming your business (LLC, Corporation, Sole Proprietorship, or Partnership)
Navigating tax compliance and record-keeping requirements
Preparing, negotiating, and enforcing legal contracts
Assisting with outside investment for your business
Assisting with selling your business
Protecting your business assets, including intellectual property
Assisting with employment issues, including compliance with
Providing court representation and legal advice
Drafting employee manuals and providing employment guidance
Avoiding lawsuits and resolving disputes
Sometimes, depending on your situation, you may need to work with an attorney that specializes in specific areas. For example, if your situation required assistance with patents and trademarks, you may want to consult an Intellectual Property Attorney or a Patent Attorney. Intellectual Property Attorneys are often copyright and trademark experts and Patent Attorneys require admittance to the United States Patent and Trademark Office (USTPO) to practice patent law. You may also find the need to consult with a tax attorney if you have a complex tax situation.
Conclusion
If you have questions about the professional services you need, consulting with an experienced general business attorney is a great place to start. Not only can a business lawyer provide you with guidance on what services could benefit your business, but reputable attorneys will also have connections with trusted professionals in other fields. For this reason, they can ensure that your company’s legal, accounting, and insurance needs are all met.