(888) 900 0205Accountant & Tax Preparer Insurance
An accountant and tax preparer typically needs several types of insurance to protect against various risks associated with their profession. Here’s a breakdown of the key types of insurance they should consider:
General Liability Insurance
Purpose: Covers claims of bodily injury, property damage, or personal injury that occur on the business premises or as a result of the business operations. This is a broader coverage that applies to accidents or incidents not directly related to the professional services provided.
Claim Example: A client visits the accountant’s office and trips over a loose carpet, resulting in a broken ankle. The client files a lawsuit for medical expenses and pain and suffering.
Insurance Coverage: General liability insurance would cover the medical costs, legal fees, and any settlement or judgment related to the injury.
Professional Liability Insurance (Errors and Omissions Insurance)
Purpose: Protects against claims of negligence, errors, or omissions in the professional services provided. This insurance is crucial for accountants and tax preparers who are at risk of being sued by clients if something goes wrong with their financial or tax-related services.
Claim Example: An accountant fails to file a client’s tax return on time, resulting in significant penalties and interest charges. The client sues the accountant for negligence, seeking reimbursement for the penalties and damages for financial loss.
Insurance Coverage: Professional liability insurance would cover the legal defense costs, any settlement or judgment, and potentially even the penalties and interest if the accountant is found liable.
Workers' Compensation Insurance
Purpose: Covers medical expenses and lost wages for employees who are injured or become ill as a result of their work. This insurance is typically required by law if the business has employees and provides protection both for the employer and the employees.
Claim Example: An employee develops carpal tunnel syndrome from repetitive tasks performed on the job, requiring surgery and time off work.
Insurance Coverage: Workers' compensation insurance would pay for the medical treatment, rehabilitation, and a portion of the employee’s lost wages during recovery.
Fidelity Bond
Purpose: Protects against losses caused by fraudulent or dishonest acts by employees, such as embezzlement or theft. This is particularly important for accountants and tax preparers who handle clients' sensitive financial information or have access to client funds.
Claim Example: An accountant’s employee embezzles money from a client’s account. The client discovers the theft and demands compensation for the stolen funds.
Insurance Coverage: A fidelity bond would cover the loss up to the bond’s limit, reimbursing the client for the stolen funds and protecting the business from financial damage.