Hello, I have a net worth of 10 million, I sold my business and want to hire a bookkeeper to handle my personal finances. I'm concerned about my exposure to embezzlement from the bookkeeper. I have spoken to several accounting firms about providing the bookkeeping services to me but their insurance only covers 500k in losses. They are not interested in providing a rider for more or increasing their insurance. I've contacted several insurance brokers and have been unable to find coverage for me personally. If I had business, no problem. Since I'm hiring personally to help with my personal finances I can't find coverage. I'm at a loss here. Can someone please point me in the right direction?
Personal Embezzlement Insurance?
- Thread starter C DiMedio
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- 5,503
I would suggest you insist that your bookkeeper have 10 million dollars of e&o insurance, and perhaps a separate crime policy too, depending on how the e&o is written.
If you only ask for a certificate, all you're getting is proof that they purchased the insurance, not that it's been written properly or actually covers what they're doing. If you want to make sure it's written well, and properly, and covers what you're looking for, you're probably going to want to work with the bookkeeper and the agent.
Furthermore, 10 million dollars of coverage is more than even most midsize businesses are interested in purchasing. The last time one of my clients wanted a quote for $10mil or more, it was a multinational multi billion-dollar conglomerate. Realistically, like it or not, you're probably going to need to compensate the bookkeeper for a large insurance policy that he or she wouldn't otherwise purchase. There are plenty of bookkeepers that don't even have e&o coverage to start with.
What state are you in?
If you only ask for a certificate, all you're getting is proof that they purchased the insurance, not that it's been written properly or actually covers what they're doing. If you want to make sure it's written well, and properly, and covers what you're looking for, you're probably going to want to work with the bookkeeper and the agent.
Furthermore, 10 million dollars of coverage is more than even most midsize businesses are interested in purchasing. The last time one of my clients wanted a quote for $10mil or more, it was a multinational multi billion-dollar conglomerate. Realistically, like it or not, you're probably going to need to compensate the bookkeeper for a large insurance policy that he or she wouldn't otherwise purchase. There are plenty of bookkeepers that don't even have e&o coverage to start with.
What state are you in?
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- 2,301
Wouldn't it be easier to have 2 accounts, 1 the bookkeeper has access to and 1 that only you have access to?
- 5,503
Among other things that is what the e&o will cover, and a crime policy as well if it is excluded for some reason.
The bookeeper would need to get it, as it is to protect from their alleged actions, not yours.
Additionally, you'll probably want to make sure they are covered for cyber/data breach as well. What if their accounting documents get stolen, which exactly what has happened to one of my clients. Or, what if they get a phony email that appears to be from the CEO instructing them to transfer funds to a bogus account, which has also happened to one of my clients.
It's your choice, but I have a feeling you may end up hiring a bookeeper to work for you directly as it will solve some of your issues here.
If you want, feel free to private message me and I can help you with this if you want. I'm in Ca too.
From my 35+ years in commercial lines the E&O will cover only errors and omissions, and normally excludes intentional acts. This is where the crime policy comes in. It typically covers intentional acts of theft when employees are doing the stealing, many policies exclude the business owners. As mentioned above, requiring cyber and data breach is a good idea. When I left the P&C side seven years ago, coverage for an individual wasn't available, however, it's possible some of the specialty personal lines markets have programs designed for the wealthy. If you'r local agent can't gain access to them look towards some of the national agencies.
This is not a unique situation, there are millions of retired high net worth people that have a bookkeeper for their affairs with no business entity involved. How do they protect themselves from the bookkeeper who is low paid and in the unique position to embezzle, do identity theft and other creative crimes to steal the assets. What do these people do to protect themselves from an insurance standpoint? I don't know of any crime policies that are available for individuals in the millions. Identity theft policies only cover up to around $50k which is woefully insufficient.
Put your net worth in an annuity or several annuities and have the bookkeeper pay your bills from an account that contains just enough to cover your finances. Don't let your bookkeeper sign checks. Problem solved.
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