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InsuranceAdvisor.com

Accountant Insurance

A typical insurance program for an Accountant includes the all-encompassing Business Owners Policy, Professional Liability Insurance. Workers’ Compensation Insurance and Cyber Liability Insurance are the necessary insurance policies you should obtain to protect your employees and the business.

What is Accountant Insurance?

Certified Public Accountants (CPA), auditors, bookkeepers, and tax preparers play a vital role in managing the finances of businesses and individuals. A tax filing error or incoherent financial records can leave your business prone to lawsuits and financial burdens. Damage to your office building and lost records may also cause you to close your practice. Accounting can be considered a low-risk business considering the property and public risks. Although, the hefty legal liability risks may weigh your small business down. Accountants across the country face similar issues while carrying about their business.

A typical package of an Accountant Insurance includes the all-encompassing Business Owners Policy and Professional Liability Insurance. Workers’ Compensation Insurance and Cyber Liability Insurance are the other necessary insurance policies you must obtain to protect your employees and the business. Accountants who own an office building and/or business personal property must purchase Commercial Property Insurance to secure their premises.

Primary Risks

Accountants and auditors face several risks and challenges while working as individual entities or with a team.

  • Scenario 1 - Your home office is washed away as a result of the flood. All the important documents are damaged. The clients hold you responsible for the hardcopy documents they had submitted to process demand retrieval.
  • Scenario 2 - Your employee made a mistake in filing tax returns for a multinational company that has been a long-term client. The client sues your accounting firm for substantial losses.
  • Scenario 3 - A client visiting your office comes in and slips and falls on a wet floor, breaking his hip and is unable to work or travel for business. He sues your firm for negligence, medical costs, and lost income.
Accountants working

Recommended Policies

Business Owners Policy (BOP)

Business Owners Policy is a holistic, customizable insurance policy that bundles up all the basic insurance needs as follows:

  • Commercial Property Insurance

This includes the contents of the accountant’s office such as computers, calculators, furniture, and other equipment.

  • Business Interruption & Extra Expense Insurance

This covers the repercussions your accounting business may face as a result of an interruption or shut down in your business caused by direct physical damage to your premises by a covered peril. Based on the limit purchased and coinsurance percentage or monthly limitation, this coverage helps compensate for lost business income and additional operating expenses incurred because of the damages suffered. An example of extra expense would be the additional cost involved with getting new furniture shipment expedited from an overseas manufacturer or setting up a temporary office space while your building is being repaired.

  • General Liability Insurance

General Liability protects you from bodily injury and property damage claims from clients and the general public in case incidents occur at your premises or while doing business away from the office.

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Professional Liability Insurance

In a world where anybody can sue anybody, it is necessary to be prepared in case of an error or omission occurring in your business. Most professions requiring a license need this insurance to protect their business and employees for mistakes that cause your clients' financial loss. While general liability protects for bodily injury & property damage, think of your professional liability as protection for financial losses suffered by your clients resulting from errors or omissions in your work process. When you work so hard to provide high-quality services and financial advice to your client firms, even minute mistakes may harm the reputation of your firm. Fast and decisive handling of Professional Liability claims is what you need to have if you hope to save your reputation and client base.

Workers’ Compensation Insurance

A Workers’ Compensation and Employers Liability provides coverage for the employees while working in the accountant’s office. Most states require business owners have a worker’s compensation policy (depending on the number of employees)that covers employee’s medical expenses, a percentage of lost wages, and family death benefits if an employee is injured on the job.  The Employers Liability portion of the policy will pay legal costs to defend your business and judgments awarded in the event your employee sues your business for negligence.  

Cyber Liability Insurance

This policy is necessary for auditing and accounting businesses as these types of businesses deal with a huge amount of client personal and financial data. Data Breach, Cyber Extortion, Ransomware, Fraudulent Bank Transfers, Notification, and Client Credit monitoring expenses as well as Crisis Event Public Relations management services can all be included in a broad form of Cyber Liability Insurance policy. Do not operate your business without this valuable coverage.

Valuable Papers Coverage

This type of coverage helps you reproduce, restore, or replace records if they are damaged by a covered event.  Records can be hard copy or kept electronically.  Coverage includes extra expense incurred from additional manpower hours or costs incurred to replace lost records.

Comprehensive Costs

All businesses face different types of risk based on operations that are inherent in the industry and also individual business risk factors.

The cost of insurance for an accounting firm will also vary based on the following factors:

  • Size of The Business
  • Type of Accounting & Auditing Services Offered
  • Annual Revenue
  • Location of The Office
  • Number of Employees and Annual Payroll
  • Business Equipment and Property Owned or Leased

Who Benefits?

All professionals in the financial and accounting industry benefit from these types of coverage. Some of the professions that Accountants Insurance is vital for are as follows:

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