McGowanPRO Professional Liability Blog / Resources / Articles

Is your firm prepared for the New Overtime Pay Rules?

Posted by Gary Sutherland on Fri, Nov 18, 2016 @ 11:41 AM

On December 1, 2016 the overtime rules for "white-collar workers" will take effect.

Effective December 1, 2016, executive, administrative, and professional employees making less than $47,476 per year are entitled to be paid overtime, including salaried employees. This salary level will be updated every three years, beginning January 1, 2020. Prior to December 1, 2016, the “exempt from overtime” salary threshold was $23,660.

 Learn more about the impact on employees and employers.

There is a strong likelihood that wage and hour claims will increase in 2017.

The most common FLSA offenses for small businesses include:

  • Not paying overtime for time worked over 40 hours in a week
  • Misclassifying managers and assistant managers as exempt
  • Paying lump sum amounts for overtime hours worked vs. paying 1.5 times the normal hourly rate
  • Not paying for overtime since it had not been pre-approved
  • Allowing employees to “waive” their rights under the FLSA

Claims will come not only from the misclassification of employees, but from non-exempt employee allegations such as:

  • Not being paid properly (incorrect overtime payments)
  • Being forced to work "off the clock"
  • Not being given sufficient meal and rest periods
  • Pay equity issues

Now is the time to be certain your firm is protected with Employment Practices Liability Insurance (EPL) - with coverage for violations of the Fair Labor Standards Act (FLSA)!

NAPLIA offers FLSA coverage with  an Employment Practices Liability policy from Mount Vernon Insurance Company, an A+ rated carrier with AM Best:

  • $100,000 sublimit for costs of damages and defense for claims alleging violation(s) of the FLSA (wage and hour)1

1 Subject to underwriter approval.

Questions?

Rob Ferrini | Program Manager | NAPLIA

Direct: 508.656. 1327 |Toll Free: 866.262.7542, ext. 1327 www.naplia.com

[email protected]

 

Tags: employment

NAPLIA Files Lawsuit Against Jorgensen for Defamation and Interference with Customers, and Defeats Jorgensen Copyright Claim in Round One in Court

Posted by Gary Sutherland on Wed, Oct 26, 2016 @ 06:00 AM

Lawsuit Filed Against JorgensenNorth American Professional Liability Insurance Agency, LLC (NAPLIA) recently filed a lawsuit in Massachusetts against Rickard Jorgensen and Jorgensen & Company for false and disparaging statements, wrongful solicitation of NAPLIA’s accounts, all of which was done in retaliation for NAPLIA leaving Jorgensen & Company’s CPAGold program.

In its court filing, NAPLIA recounts that it previously placed business through Jorgensen & Company for a number of years but made a business decision to exit his MGA in October of 2014; that  Jorgensen & Company agreed to keep NAPLIA’s customer information confidential and not to solicit NAPLIA clients; and that shortly after exiting Jorgensen & Company’s CPA Gold program, Jorgensen & Company violated this agreement by soliciting  NAPLIA’s clients using information previously supplied to Jorgensen & Company by NAPLIA.

NAPLIA’s complaint also details Jorgensen & Company’s attempts at misappropriating NAPLIA clients included false and misleading statements made about NAPLIA’s CPA ProSecure program.

Jorgensen makes reference to NAPLIA being terminated, this is not true, and the CPA Prosecure program will continue to insure accounts through 2018.

NAPLIA will seek all legal remedies against Rickard Jorgensen and Jorgensen & Company and is issuing this press release as a direct rebuttal to the false, misstated and incorrect statements made by Jorgensen & Company on October 14, 2016 via press release and continued direct solicitation of NAPLIA’s accounts.

NAPLIA Defeats Jorgensen & Company’s Attempt to Obtain an Injunction including its Copyright Claim:  Separately from NAPLIA’s Massachusetts lawsuit, Jorgensen & Company filed a lawsuit against NAPLIA in federal district court in New Jersey making various allegations including a claim that Jorgensen & Company’s rate filings with state regulators carry copyright protection, and that NAPLIA and its insurance carrier violated the copyright.  Jorgensen & Company immediately sought an injunction for relief with respect to its claims.  The New Jersey Federal Judge ruled against Jorgensen & Company’s request for an injunction on all counts, stating that Jorgensen had not met the legal standard for an injunction on any of its claims.  With respect to Jorgensen & Company’s copyright claims, the Court stated that NAPLIA was likely to win by stating:   “…there is a substantial likelihood that Defendants [NAPLIA] will be able to show that Plaintiff [Jorgensen & Company] cannot claim copyright protection over the methods of calculating rates, or any concepts and principles embodied in those methods.”  NAPLIA is of the opinion, based on the Court’s ruling, that Jorgensen & Company's high hopes for its prospects in the current New Jersey litigation are grossly misplaced. 

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About NAPLIA:

North American Professional liability Insurance Agency, LLC (NAPLIA) accountants program CPA ProSecure is a quality professional liability solution for public accounting firms nationwide. After continually wanting more for our CPA firm clients but never finding the ideal insurance solution, we decided to do something about it.

The CPA ProSecure policy was designed by our professional liability insurance experts with decades of experience working with CPA firm clients by cherry-picking the best features from dozens of policies in the market today and adding coverage enhancements where we perceived gaps. We’re proud to offer you what we believe is the best insurance policy available for CPA firms today.

Working with CPA ProSecure you can expect more than just a policy. We are dedicated to providing you with continuous risk management and practical learning opportunities to keep your firm protected, the highest quality customer service so you can feel comfortable calling us with any issue, and a team of risk and legal experts who are ready and able to work with you to solve or mitigate any problem that arises.

NAPLIA, an agency well known and respected in the accountants’ professional liability industry for close to 20 years, and is the managing general agent (MGA) for CPA ProSecure. The professionals at NAPLIA have decades of specialized experience in providing professional liability, and related insurance products to public accounting firms.

We are proud members of the Professional Liability Underwriting Society (PLUS), the Better Business Bureau, and hold the highest ranking from Dun & Bradstreet for companies our size.

NAPLIA and CPA ProSecure present Loss Prevention webinar series with guest speakers Stephanie Perkins, Esq. Wilhelm Dingler, Esq. and Gary Kessler, Esq.

Posted by Gary Sutherland on Wed, Oct 26, 2016 @ 05:55 AM

A trusted authority on educational materials for the CPA community, NAPLIA, through its CPA ProSecure program, have arranged a three-part NASBA approved webinar series on risk management with three sessions featuring speakers Stephanie Perkins, Esq. Wilhelm Dingler, Esq. and Gary Kessler, Esq. 

Stephanie Perkins, Esq. managing shareholder at Perkins Law Group addressed emerging trends in risk management. Through analysis of the risks associated with data protection, engagement documentation, wealth transfer, and business engagements Perkins presented the benefits of recognizing trends in risk management.  Nearly 200 people attended this presentation live in September and hundreds more have watched the recorded version to date.  View the webinar any time for free at http://www.brighttalk.com/channel/13113 

October 27, 2016 2 pm – 3:15 pm EST - Wilhelm Dingler, Esq. Shareholder at Marshall Dennehey Warner Coleman & Goggin, P.C will discuss bookkeeping, personal contact with audit clients, areas of expertise, fiduciaries, lack of disclaimers and many more of the top ten trouble spots.

November 16, 2016 2 pm – 3:15 pm EST – Gary Kessler, Esq. is the president and shareholder of Kessler Collins, P.C. In the final session of this webinar series Kessler will look at five cases that will change the way you practice. These cases will make you think twice about some of the practices that are in place in your firm. Kessler assures the viewers that they will “leave this webinar with an understanding of the types of claims that happen in firms like yours”. 

To reach a broader audience, NAPLIA offers programs via live and recorded webinars on BrightTALK, a free platform for webinars and videos. Accounting professionals who would like to participate in the NAPLIA Loss Prevention webinar series can register on the NAPLIA Channel of BrightTALK. NASBA approved CPE credit and CPA ProSecure policy credits are available for those who attend all three parts and follow the participation guidelines, which can be found on the webinar registration page. (http://www.brighttalk.com/channel/13113)

 

ABOUT NAPLIA 
NAPLIA has specialized in providing Fiduciary Liability to Plan Sponsors since 1998, in concert with Professional Liability, (errors & omissions) and related insurance products for Accountants, Investment Advisors, Attorneys, and other professionals. No other national agency can match our personal service and expertise in the risks associated with operating under ERISA; and no other independent agency can match our national recognition for excellence in the Qualified Plan and Investment Advisory insurance and bonding space.

 

ABOUT CPA PROSECURE 
North American Professional Liability Insurance Agency, LLC (NAPLIA) created an Errors and Omissions insurance program designed specifically for accounting and consulting firms called CPA ProSecure. Working with CPA ProSecure you can expect more than just a policy. We are dedicated to providing clients with continuous risk management and practical learning opportunities to keep firms protected, the highest quality customer service so partners can feel comfortable calling us with any issue, and a team of risk and legal experts who are ready and able to work to solve or mitigate any problem that arises.

Cyber Claims in 2016

Posted by Gary Sutherland on Wed, Jul 27, 2016 @ 02:36 PM

The first six months of 2016 show cyber claims increasing 56% over 2015

Hacking and Malware claims are up by 62%

Professional service firms cyber claims are about 14.5% of all cyber claims reported

 

 

*According to specialty insurer Beazley

Tags: cyber

Top 5 take-aways from BD Watch conference on the new DOL fiduciary rule

Posted by Gary Sutherland on Wed, Jul 20, 2016 @ 04:13 PM

On July 18, 2016, Gary Sutherland and Paul Smith headed to New York to attend the IA Watch and BD Watch conference on the Department of Labor’s New Fiduciary Rule: How Your Business Must Change.

The time was well spent, except for perhaps, the traffic on the way back.  Here are the top five things we learned about the new fiduciary rule.

1.  Hearing from the legal and compliance experts on the new DOL fiduciary rule you couldn’t help but hear the following themes.

  • Major time commitment
  • Major allocation of resources and money
  • Technology must lead the way to compliance
  • In some cases professionals are still in “denial”
  • The use of independent outside consultants
  • Lots of work for the ERISA attorneys
2.  Compliance strategies considered.
  • Limit product offerings
  • Level compensation
  • Combination of both
3.  What should be in your BICE statement? by Marcia Wagner
  • Scope
  • Arbitration
  • Standard of Care, best interest standard and advisor compensation
  • Warranties
  • Disclosures
4.  IRA rollovers “must” considerations by the advisor
  • Leave it alone
  • Cash it out
  • Bring with you to the new employer
  • Give it to the advisor

5. Additional comments

  • Robo Advisors for small plans and IRAs will be the norm not the exception
  • “Good compliance is good business”
  • Level fees and inactivity surveillance guidance
  • Level fee and the use of BICE light
  • Original signed BICE agreement must be kept for 6 years
  • ERISA claims no “right” to a jury
  • BICE equals best interest contract exemption

Tags: risk management, liability

NAPLIA Announces New Program Manager for Bookkeepers’ Professional Liability Division

Posted by Gary Sutherland on Fri, Jul 08, 2016 @ 07:50 AM

July 8, 2016 - Framingham MA 

NAPLIA Announces New Program Manager for Bookkeepers’ Professional Liability Division

Framingham, MA - NAPLIA has been providing Errors & Omissions Insurance designed specifically for today’s small Accounting Firms, Bookkeepers and Tax Professionals since 1998. 

Courtney Jackson Foley has returned to NAPLIA to take the Bookkeepers’ division to the next level.  As Program Manager – Bookkeepers’ Professional Liability Division, she is responsible for policy quotes and issuance, answering client questions and helping with claims issues, and maintaining NAPLIA’s high client satisfaction rating.  Courtney brings nearly 15 years of insurance experience to this role and she is actively pursuing the designation of Registered Professional Liability Underwriter (RPLU).

As an industry veteran, Foley knows the importance of strong alliances with professional associations.  NAPLIA is endorsed by the American Institute of Professional Bookkeepers, (AIPB).  “NAPLIA’s relationship with the AIPB is essential to our success with the bookkeeping profession.  We are honored to work with the AIPB to offer resources and insurance for its 30,000 members” comments Foley. 

One of Foley’s first initiatives is to roll-out a new website for bookkeepers through which they can obtain a quote and secure errors and omissions insurance quickly and easily.  By answering a few questions, NAPLIA’s sophisticated new site will be able to properly define the coverage needed for each bookkeeper’s practice.  AIPB members will receive a discount.

Gary Sutherland, CEO, NAPLIA talks about Courtney’s return to NAPLIA, “We are thrilled to have Courtney working with NAPLIA as the leader of our Bookkeepers’ Professional Liability Division.  She brings a mix of experience and savvy that will serve our clients and the profession well.”

Courtney can be reached [email protected] or 508-656-1342

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NAPLIA has specialized in providing Professional Liability (errors & omissions) and related insurance products for Accountants, Investment Advisors, Attorneys, and other professionals. No other national agency can match our personal service and expertise in the risks associated with operating under ERISA; and no other independent agency can match our national recognition for excellence in the Qualified Plan and Investment Advisory insurance and bonding space.  Learn more at naplia.com. 

 

Tags: NAPLIA, professional liability, Bookkeepers

CPA FMA Conference in Baltimore

Posted by Gary Sutherland on Wed, Jul 06, 2016 @ 03:40 PM

 

Stephen of NAPLIA hangs out with some of his good friends while sponsoring the dinner event at the CPA FMA Conference in Baltimore!

 

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Advice and apps to stay organized in a world full of information

Posted by Gary Sutherland on Thu, Jun 09, 2016 @ 11:57 AM

I have written before on the enormous amount of information available on a daily basis and on how hard it is to keep up with the sheer volume of content. I like many try and keep as current as I can but have also decided I can no longer fret over it, there isn’t enough time in the day.

There is one tool that I use and enjoy, it is called “getpocket”. This is an app that can sit on your browser bar and allows you to click the + feature and add the story, article, video other content to a saved folder within “getpocket” for later reading or review.

This is helpful when I see something useful but am unable to read it now but do not want to forget it or lose it.

There are two versions of “getpocket” a free version and a paid version (less than $50 per year). The paid version allows for sub folders and no pop up ads.

Speaking about apps, I have 68 phone apps, many I use frequently. My current favorites are the flashlight, local weather and a new one called “Truecaller”. Truecaller identifies incoming calls and even marks many as “SPAM”. I can also block incoming call with one easy click. 

This is a real time saver as I no longer pick up sales calls on my cell phone thinking it must be important or urgent if they are calling my cell phone.

I was curious about the number of phone apps available, and it stands at about 1.5 million different phone applications, so I guess my 68 is within reason?

I have also discovered the best time for me to read and comprehend new information is in the morning, preferably early with my coffee, probably because I have hit the 60 age group category.

Disclaimer: I have no affiliation and do not derive any benefits for the above mentioned vendors.

Tags: cyber

Do you want the short or the long answer?

Posted by Gary Sutherland on Fri, May 20, 2016 @ 09:08 AM

The answer to your question is:  Do you want the short or the long answer?

Often as an insurance agent we are asked technical questions of insurance coverages and the answer can be a quick, short and concise answer or a longer answer based on risk management.

One question asked frequently: My client wants me to be a trustee of their……does my professional liability insurance cover these services?

The short answer is yes the policy provides coverage’s as a trustee except for where you are a beneficiary or distributee of said trust

The long answer requires a number of questions:

  1. Are you the only trustee?
  2. How are you being compensated?
  3. What are your trustee activities?
  4. Is this a new trust or existing trust?
  5. What type of trust?
  6. What are the size and type of assets in the trust?
  7. Are you also providing investment related services?
  8. Are there any complexities of the trust that need special handling?

Based on your answers to the questions above, will generate our longer answer and offer risk management advice based on the insurance policy, its endorsements and trustee claims we have seen over the last 20 years.

For example picking question #2, how are you being compensated?

If your answer is the trust is paying me a stipend of $1,000 as an individual, then in order to make sure your firm insurance policy covers these activities we would want to add you as an additional insured to the existing policy. If the trust fee is paid to the accounting firm then the additional insured is not required. Pro bono work is covered under the policy on a firm basis, the policy states the following:

Pro Bono work, provided that it is performed with your consent and knowledge;

If you, the individual are acting as a trustee on a pro bono basis, then the firm should have this acknowledged in writing and kept with the insurance contract.

One final word of caution, unlike many other accounting activities that have fixed statue of limitations trustee services do not and the start date of the statute of limitation is often the date of discovery or error. About five years ago we dealt with a claim that had trustee services provided in 1984. You can image the difficulty in defending the claim when the original accountant was deceased and records purged.

 

 

 

Gary Sutherland presenting at LeClairRyan 2016 Accountant Liability Event

Posted by Gary Sutherland on Thu, May 19, 2016 @ 01:22 PM

LeClairRyan.png

Gary Sutherland, CEO of NAPLIA will be presenting on the topic of Protection and Coverage in a Cyber World at the LeClairRyan 2016 Accountant Liability Update.

All are welcome to attend this free event in Waltham, MA.

Protection and Coverage in a Cyber World
Cyber liability is making headlines every day. Understanding the three parts of cyber insurance, regulatory, first party and third party coverages is critical when potential claims arise. Plus discover how you can protect your practice from social engineering and fraudulent wire transfers.

WHEN

Thursday, June 23, 2016
8:00 a.m. - 12:30 p.m.
Continental breakfast is provided. Program begins at 8:30 a.m.

WHERE

Westin Waltham
70 Third Avenue
Waltham, Massachusetts
Click here for directions.

 

Register Now!