2015 Tax Deduction Opportunity: 5 Steps to Overpay For Your Professional Liability Insurance

Follow these five easy steps and you will certainly overpay and buy the wrong professional liability insurance for your firm.  When you speak to your peers or have a claim, you will find that you paid far more than you had to and there’s a good chance that your claim won’t be covered at all.  So if you are looking for higher end-of-the year business expenses or uncovered losses to deduct – you’ll be set!

Five Easy Steps:

  1. Select your broker for not good reason at all. Use an insurance generalists, like the mom and pop place on the corner, or a mail away insurance program where you never speak to an experienced person (i.e. press 1 if your firm starts with A-D, press 2 if your firm starts E-N).
  2. Avoid all brokers that specialize in law firms and don’t ever buy Cyber, Employment Practices Liability, Valuable Papers coverage, that are customized to law firms.
  3. Mail back a hand marked copy of last year’s application that is barely legible. Give vague answers and don’t provide any follow up information especially on the claims sections.
  4. When in doubt, add all of the less risky expensive specialties in your percentage total to the more expensive practice areas. Just pile into the catch-all Securities, Corporate, IP, and Class Action categories.
  5. Do not report incidents or matters that could give rise to a claim during your policy period. Better yet, don’t even discuss them with your broker to eliminate any possibility of coverage.

If you follow these five easy steps, I guarantee higher end of the year business deductions.  You will get the opportunity to share with your management team how this year there won’t be any bonuses or distributions.  Happy New Year.

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