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Comment by Susan Schuele on December 22, 2008 at 12:38pm

I just thought I'd throw my .02 in on this discussion. I agree with Nicky because let's face it, a lot of us won't "need" our health insurance, life insurance or car insurance because we all hope that we will stay well, not die in a tragic accident or have a bad car accident. But we would not DREAM of going without that insurance. And that's exactly what this is - it's insurance to protect yourself. And IMHO (in my humble opinion), a must for any business owner.

Comment by Carol L. Hebach on December 22, 2008 at 12:16pm

Thanks for the clarification, Diane ...

Comment by Diane M Hess on December 22, 2008 at 12:14pm

Ok Ladies – I’ve inquired with my advisor (who is a Financial Advisor for Large Corporations and a long term client of mine) and he has advised me that what Nicky has kindly shared with us is true especially if we are providing accounting services. It does not matter if you are providing the service for an entrepreneur, small business owner, or a large corporation. You need to protect your assets.
Now Carol – I would say by reading your post that you are looking at this differently. You are approaching it not as a business to business relationship rather a freelance contractor to business relationship. In the later relationship, I would agree it is up to the corporation “providing” you’ve signed a legal document of releasing you of such. BUT even then, you could get caught into a nasty dispute and be sued.
I believed that having an LLC was enough plus a contract that states who is liable for what but according to my advisor this may not hold any clout in a court of law if I am being sued for an accounting error that causes a business the loss of clients and such. This advisor has been in business much longer than I and I trust what he has to say. All it can take is one bad apple to wake you up.

Comment by Mary H. Ruth on December 22, 2008 at 12:04pm

Good discussion, though. The cost of insurance, and the uncertainty of it, make it a difficult subject. Maybe a good compromise is, when you are dealing with large costs on your client's part, clarify understanding about liability before you begin work.

Comment by Nickey Hollenbach on December 22, 2008 at 11:55am

I must respectfully disagree - it makes no difference how much you earn. It only takes one small error on someone's part that can cost a client lost revenue, i.e., a scheduling error which results in a missed meeting which results in lost revenue for your client; a missed message requesting you to cancel a flight, hotel, etc., that gets charged to his card. That client may look to you for restitution. I have a client who just flew to the middle east - his plane ticket was in excess of $7,500. I could go on and on with examples. Sometimes we just need to agree to disagree on a subject, and I see that we do - and that's OK, of course!! I have nothing to gain by suggesting anyone get professional liability insurance - I'm not in the insurance industry! :) I wish you all the very best and hope that not one of us ever has to worry about using PLI ever.

Happy holidays to everyone!!

Comment by Carol L. Hebach on December 22, 2008 at 11:50am

Touche, Mary! In addition, particularly if you are doing work for a larger corporation, it is up to THEM to secure professional liability insurance that also includes all contractors and subcontractors. If a VA is doing subcontract work for another VA and they are contracted for a much smaller company, make sure all your Ts are crossed and Is dotted before accepting the subcontract. This will include researching the actual client and possibly the VA contractor if they are not known to you to be terribly business savvy.

Comment by Mary H. Ruth on December 22, 2008 at 11:41am

I would suspect that the need for professional liability insurance is relational to the size and pace of your business. A solopreneur making less than $50,000 is probably in a safer place, while a biz with employees and sizable revenues is much more liable. I can understand why a VA who contracts with associates might want them to have this insurance - one reason why I prefer working alone! The VAs for whom I've done subcontracting work so far haven't required this. To be honest, I'd probably decline the work if they did.

Comment by Nickey Hollenbach on December 22, 2008 at 10:48am

I'm sure you are right. Can you please share what those other ways may be? I would surely love not to have to spend money on an unnecessary insurance premium!

Comment by Carol L. Hebach on December 22, 2008 at 10:35am

Nickey, I daresay my legal background is at least as extensive as yours and there are other ways to protect yourself instead of incurring a fee for insurance that, in all likelihood, you will never use.

Comment by Nickey Hollenbach on December 22, 2008 at 10:16am

Ok, Carol - duly noted. I've never needed my homeowner's insurance policy, either . . . yet. It must be my legal background and all the nasty stuff I've seen. But then again, working in a law office you don't get to see much of the good stuff.

Let me know, Dawn, if you decide to get it in place. Thanks!

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