Insurance for accountants

Professional liability insurance, sometimes called errors and omissions insurance (E&O insurance), is insurance coverage for claims against businesses that provide professional and personal services – for accounting businesses like yours. E&O insurance is crucial for accountants because it provides protection against claims of negligence, which are all too common with the preparation of tax returns and other important financial documents. Professional liability insurance for accountants is also useful when clients do not understand or accurately follow your advice.

When is it important to have professional liability insurance? The examples for accountants are plentiful and include the following instances:

• Negligence: An accountant completes a client’s tax return. The client is audited and found to have used erroneous numbers and has to pay an additional tax and fine. The client sues the accountant, insisting that they should have known the numbers weren’t correct. The accountant could be protected by a professional liability insurance policy.
• Protection even if you have not made a mistake: An accountant examines financial records of a business and makes a recommendation. The client ignores the recommendation resulting in a business loss. He blames the accountant for not being clear enough in explaining the situation. The client makes a claim against the accountant, which could be covered by a professional liability insurance policy.
• Claims arising from services provided in the past: The IRS suddenly audits a past client of yours for a tax return you prepared for them five years ago. The subsequent audit results in a major financial loss for the client, who promptly sues you. Hiscox can cover certain claims arising from such an instance, even if the work was completed before you were insured with us.

Even if you were as clear as possible about a financial recommendation, finances are complicated, and misunderstandings do occur. Avoid possible scenarios like the above by requesting a Hiscox accounting insurance quote today.

General liability insurance, sometimes called commercial general liability (CGL), protects your business from another person or business’s claims of bodily injury, associated medical costs, and damage to property. The risks that accountants face every day go far beyond just switching around a few numbers or making a miscalculation. Here are a few real-world examples that an accountant may encounter in the normal course of business:

• Bodily injury: A client rushes into an accountant’s office with their tax documents. It’s raining, and the client slips on the wet floor and falls, breaking their wrist and requiring a trip to the emergency room. A general liability policy could cover the client’s medical expenses.
• Personal injury: While having lunch at the local deli, a temporary employee of an accounting firm is overheard talking about a client in a false and unflattering way. The client finds out about the conversation and sues the firm for slander. The accounting firm could be protected by a general liability policy.
• Property damage: An accountant is at a client’s office reviewing their books. The accountant spills a cup of coffee on the client’s server, damaging it and corrupting some of the data. The cost to replace the server and recover the data could be covered by a general liability policy.

Situations like the above are very unfortunate, but they do happen. See how Hiscox can help you protect your business by requesting an insurance quote.

Learn more about how much general liability insurance costs.

A business owner’s policy (BOP) is a combination of general liability and business property insurance. Essentially, accounting professionals get the best of both worlds when they choose a Hiscox BOP to protect themselves and their business. A BOP is often used to provide balanced coverage for small businesses and for business owners who also want to protect their own business equipment.

By having this type of accounting insurance, financial professionals can empower themselves to take on new clients and venture into new areas of work with the security of knowing their belongings are protected. Some examples of what could be covered with a BOP for accountants are:

• An accountant has an office in his home. The office is broken into and several computers are stolen. The accountant’s BOP could cover the cost to replace the computers.
• The office above an accounting firm is flooded by a burst pipe and the water leaks into the office below, damaging several desks, chairs, and computers. The accountant’s BOP could cover the cost to replace the damaged furniture and equipment.
• The CEO of a small accounting firm owns the building in which his firm is located. After hours, a fire breaks out and burns a large part of the building. A BOP may insure the property, including your accounting firm's office, against damages caused by the fire.

None of the above situations are desirable, but they can happen. Protect yourself and your business from risk with a trusted and reliable insurance company like Hiscox. Learn more by requesting a free quote.