Accountants worsen under-insurance problem

Accountants may not be communicating the importance of having the right insurance cover in place and are letting their clients’ policies lapse, which worsens the under-insurance problem. 

That is according to Effective Referral Management director David Phelan, who said accountants have a responsibility to ask their clients questions about their current cover. 

Accountants, he said, often develop close relationships with their clients and are some of the professionals most trusted by the public. 

“In reality, it is the accountants who we believe have the most influence with their clients in terms of ensuring all their needs are met, including adequate levels of insurance,” Phelan said. 

“However, some choose to not address risk insurance with their clients as they are not confident in how to position the discussion or think they are trying to sell something,” he added, saying accountants need to take a more active role in attending to other services that their clients may need. 

Small business owners in particular are exposed if there is not adequate income protection in place. Insurance, Phelan said, is not something clients usually purchase voluntarily - it requires the advice of a professional to ensure client needs are met. 

“By asking some extra questions and making sure current programs are reviewed regularly, accountants are also enhancing their relationship with their client.”