Professional Liability insurance covers your accounting business if you’re sued for performing professional services, even if you haven’t done anything wrong.
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Accountants Offer a Valuable Professional Service to Their Clients
As an accounting professional, you provide a valuable service to your clients and you need insurance to cover your business against various professional risks. Preparing corporate tax and consequences of inaccurate financials can lead to lawsuits. Insurance companies like APOLLO offer a customized small business insurance package tailored to fit your accounting business insurance needs.
No matter how much experience an accountant may have in the industry, there is still a possibility that they will be hit with an expensive lawsuit. Mistakes happen, or an irate client might sue their accountant because of a perceived problem. Whether the lawsuit is justified or not, most small businesses would not be able to financially withstand a lawsuit. A professional liability insurance policy is designed to absorb those costs so that your accounting company does not have to.
That’s why insurance for accountants is a smart business decision. Not only do you get the peace of mind that comes with knowing you will not be financially liable in the event of a lawsuit, you are securing the future of your business, personal assets, and professional career.
Professional Liability Insurance
Accountants professional liability insurance (also called errors and omissions) responds to lawsuits to pay for legal fees, settlement or court award if you are sued for allegations of negligence, an error or omission causing financial loss.
General Liability Insurance
General liability insurance for accountants covers bodily injury from things like a slip and fall on your office premises. It also covers libel and slander through the personal and advertising injury coverage. Having a good policy with high liability limits can end up saving you thousands of dollars in the long run.
Contents insurance for an accountant covers the physical things your business owns. This includes computers, furnishings, office tenant improvements, or costs associated with relocating in the event of fire, water damage, flood, theft, or other perils included in the policy. These are covered on a replacement cost basis, meaning if they are totally destroyed the insurance policy pays to replace that item. It is important to have a high enough contents limit to replace everything in your business.
Commonly Asked Questions About Accountants Insurance
Why do accountants need insurance?
Accountants are given access to sensitive information and play an important role in advising their clients of potential opportunities or pitfalls of financial management. By giving any kind of professional advice brings risk requiring insurance. Larger, more sophisticated companies often request proof of general liability and professional liability insurance from contracts, meaning that insurance is often mandatory for accountants to work with these types of businesses. Accountants can be sued when one of their clients or a shareholder incurs financial loss, regardless of fault. It can be very costly for an accountant to defend this type of lawsuit, especially at a small firm or solopreneur company. To ensure this type of risk isn’t detrimental, a proper insurance policy is key for the planning and operation of any business.
What types of risks does my small business face as an accountant?
Accounting firms provide technical service, advice, and counsel to their clients. Sometimes there is an alleged error or omission in the work you perform which can lead to a lawsuit. Accountants manage very sensitive information and business processes for your clients. A lawsuit, regardless of fault, can be costly to defend. If your accounting business has an office or leased premises you are also exposed to the risk of slips and falls on site when your client visits. If there is a fire, flood, burst pipe or other property damage it can severely destroy your office equipment, furnishings, causing your accounting business to incur additional expenses to relocate while the damage is being fixed. Additionally, in the digital age we live in today the collection and storage of client information leads to cyber risks such as personal or confidential data being exposed by accident or by hacking. Accountants are provided with lots of client files and access which can be breached either accidentally or through other malicious software. With new regulations and expectations for small businesses to protect client data, it’s important for accountants to make sure their insurance protects them against these risks.