Category Archives: Insurance

Why Management Services Providers Are Starting To Consider Liability Insurance Policies

Managed services providers (MSPs) are starting to see the necessity of liability insurance policies as the IT field continues to grow more complex. They see this change as a necessity to get the right coverage for their businesses.

Standard Practice

Michael Corey, who used to work for a managed services company, recalls a time when a large oil company wanted to hire their services to manage its computes remotely. He says that although they have not formally met yet, the company wanted Corey’s firm to insure them for up to $20 million in case something unexpected happens, leading to an explosion, fatality, and/or damages while one of his people was on site. It was understandable as companies have been following this standard practice for years when dealing with service providers. However, Corey argued that the amount that the client was looking for was nowhere near expected. It took him a lot of meetings and negotiations before he finally got a waiver. He said it slowed down the sales cycle by two months—two months spend negotiating and explaining each other’s sides instead of getting started with the actual work. Corey now works as a co-founder of an audit protection insurance and license management for Oracle called License Fortress.

Liability Insurance Policies

With the growing popularity, and therefore risks, in data management, MSPs are starting to consider liability insurance policies to protect themselves. A cyber liability insurance, in their perspective, is absolutely necessary for when unexpected harm happens to the customer while they are in charge. As of now, not all MSPs have this kind of insurance, which makes it difficult for them to protect themselves from data loss or cyberattacks—things that could harm their clients which, sometimes, is out of their control. It works in a similar fashion with audit protection insurance in a way that users are protected from unexpected costs incurred to them through no fault of their own.

Corey adds that when a management services provider takes over a business’ IT environment, their clients put their trust on them. This means that once they take over, they are held responsible for everything that happens to it, even in terms of cyberattacks and other things out of their control. They believe that liability insurance policies will help MSPs perform their duties while getting proper coverage as well.

CRA Fines Po Co For Financial Irregularities’ And Questionable Expenses

The frequency of tax audits and investigations have substantially increased because of technology tools that enables detailed cross referencing of information from different government agencies. When an individual or business is subjected to tax audit, costs can be substantial. It is for this reason why there is coverage provided by audit insurance company to cover professional fees that will be incurred during the response process.

Port Coquitlam mosque was recently cited for some financial irregularities and potential ties to overseas funding linked to militant Islamic group Hamas. The mosque expects to receive a federal grant worth $53,000 for the improvement of security in communities that may be subjected to hate-motivated crimes. According to the Ministry of Public Safety and Emergency, the money will be used for the procurement and installation of CCTV’s and alarm system at Masjid Alhidayah and Islamic Cultural Centre on Kingsway Avenue.

Last May, the society that that operates the PoCo mosque was required to pay a fine of $9,120 after Canada Revenue Agency (CRA) audit from 2011 to 2013 revealed thousands of dollars in financial irregularities and questionable expenses amounting to $127,000. CRA noted spending that amounted to $66,028 for groceries and pharmaceutical items, $22,193 for gas and car washes, $2,967 for meals taken at restaurants, $4,239 for electronics items that include PlayStation games and an iPad and $4958 for an Evolution spa.

Most of the expenses that were paid through the credit card of Mr. Bahr were reimbursed but they are considered as personal expenses constituting undue benefits. The CRA also noticed some links to the Eid Foundation, an organization based in Qatar and member of Union of Good, an organization created by Hamas leadership to transfer funds to terrorist groups.

The government takes seriously allegations of links to organizations that support terrorism. However, CRA has chosen not to revoke the status as a registered charity.

The benefits that can be gained from audit insurance company apply to both the accountant and the client. It is human nature to commit mistakes but when it comes to tax audit, mistakes take a new meaning. Audit insurance is the protection from substantial costs that will be incurred from having to sort out all audit requirements.