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What Is Professional Liability Insurance Coverage?
Professional liability insurance protects businesses when employees make mistakes in the professional services they’ve provided to customers or clients. This coverage is also known as errors and omissions insurance (E&O). Even if you’re an expert in your business, mistakes happen. And if your client or customer thinks a mistake in your professional services caused a financial loss, they can sue you.
What Is Accountants Professional Liability Insurance?
As an accountant or tax professional, you provide financial advice to your clients. However, with this responsibility comes the risk of financial loss. That’s why accountants’ professional liability insurance is crucial for your business’ risk management plan. This insurance coverage is also known as errors and omissions insurance and can help cover claims of:
- Negligence
- Misrepresentation
- Inaccurate advice
Why Should a CPA Get Professional Indemnity Insurance for Accountants?
CPA firms provide financial services to clients all the time, which means they’re especially vulnerable to errors or omissions claims. If you’re wondering the difference between an error and an omission, we can explain. If your employee makes an auditing mistake, this is an error. If you don’t finish a service that was promised in the engagement letter for a client on time, this is an omission.
In either situation, professional liability insurance protects your company from certain risks. It’s similar to malpractice insurance for medical professionals in that it can help pay your legal costs if your client sues your accounting business for a mistake.
Accountant Professional Liability Insurance Coverage
Although you try your best to run your accounting firm perfectly, mistakes can happen. Professional liability insurance for accountants can help protect your business if a client sues you because:
- You overlooked a large expense while putting together your client’s financial statement.
- They believe their financial loss on their tax returns was due to your tax preparer making a bookkeeping mistake.
- You overestimated your client’s budget and gave them inaccurate financial recommendations.
It’s important to pay attention to the retroactive date in your accountants professional liability insurance policy. This means your insurance only covers claims for incidents that occurred on or after this date. So, a policy with an earlier retroactive date can offer more protection for your accounting business.
Professional Liability Insurance for CPAs
Professional liability insurance coverage, also known as professional indemnity insurance, can be beneficial to professional accountants and certified public accountants (CPAs). No matter the size, every accounting firm faces professional liability risks. We offer professional liability insurance for CPAs in small to mid-sized accounting and bookkeeping firms. To learn more, obtener una cotización hoy mismo.
What Accountants Professional Liability Insurance Covers
Accountants professional liability insurance doesn’t cover every type of claim. For example, this insurance won't help business owners with claims of:
- Daños a la propiedad
- Lesiones corporales
- Copyright infringement
To get insurance coverage for these types of claims, you’ll want general liability insurance.
How Much Does Professional Liability Insurance for Accountants Cost?
Every accounting business is unique. So, your cost for professional liability insurance may be different than someone else’s. Some factors that can impact your cost include your business’:
- Annual revenue
- Employee training program
- Contratos
- Lugar
- Claims history
- Límites de la cobertura
Get Started With an Accountants Professional Liability Insurance Policy
Professional liability insurance for accountants can help protect your accounting firm if you make a mistake in your professional services. If a client sues your business, you'll want to work with an experienced insurance company. We're backed by more than 200 years of experience and our specialists are here to make sure you get the kind of insurance coverage you need. Whether you need insurance quotes or assistance with a claim, we’re here to help. Obtenga una cita hoy mismo.
Last updated: December 6, 2022
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