Accountant insurance

What Type of Accountant Insurance Do I Need?

What Kind of Insurance is Best for Accountants?

Professional liability insurance

Accountants carry a lot of responsibility. You’re managing your clients’ finances and making recommendations that impact their taxes. But what if you make a mistake? Or overlook an important detail? Just one error could cost you a lot of money.

With professional liability insurance, you’re in good shape. Your plan may cover you and your business if there’s an error or omission with your work. But without this protection, you’re putting your business at risk, and you might be on the hook to pay for these errors.

Consider this example. You’re preparing a client’s tax return and incorrectly record income, causing your client to owe twice as much in taxes. Later your client discovers the discrepancy and hires another accountant to fix the return. Then he sues you for the costs. If you have professional liability insurance, your plan may cover your legal fees, as well as other claim costs up to your policy limit.

Remember, even the best accountants can make mistakes. That’s why it’s wise to protect yourself and your business ahead of time. Get professional liability insurance before you start working with any new clients.

You can expect professional liability insurance to cover:

• Negligence or alleged negligence
• The cost of hiring a lawyer
• Omissions or alleged omissions
• Claims and damages
• And more

Keep in mind, it usually doesn’t cover:

• Intentional negligence
• Bodily injury
• Property damage
• False advertising
• Patents and trade secrets
• And more

Commercial general liability insurance

As an accountant, you want to get commercial general liability insurance (CGL). This plan covers your business if there’s an accident or injury at work, or damage to property. It can also cover you if someone damages your company’s reputation, resulting in a loss of revenue.

Don’t think it can happen? Think again. Accidents and damage can happen anywhere and to anyone—and can be costly. In fact, the average claim for small business property damage or customer injury is $30,000!

And, according to one survey, more than a third of small business owners experienced events that could lead to claims.

An example:

Imagine you rent space for your accounting business. The floor was recently washed and still slippery. As a result, one of your clients slips and falls. Later, this client sues you to pay for medical bills.

Without coverage, you would need to pay for a lawyer to defend yourself, plus the medical bills. But with commercial general liability insurance, you don’t need to worry as much. Your plan may cover legal fees and other costs from the claim up to limit of your policy.

Here’s what general liability insurance typically covers:

• Bodily injury to another person
• Third-party property damage
• Personal and advertising injury
• Medical expenses
• And more

However, it usually doesn’t cover:

• Personal property damage
• Professional services
• Workers compensation or an employee’s injury
• Damage to your work
• Vehicles while in business use
• Expected or intentional injury or damage

Workers compensation insurance

Do you have employees, even part-time workers? Whether you hired a junior accountant or an administrative professional, you may need workers compensation insurance if you have staff. Get a plan as soon as you hire your first employee. It’s actually a legal requirement in most states.

It makes sense. In 2017, work injury costs added up to about $161.5 billion. Plus, the average injury claim for a small business owner is $39,000. Imagine paying that amount if your employee gets injured on the job. But with workers compensation, you don’t need to worry. Your plan may cover medical bills, emergency room visits, medications, and even lost wages.

In general, workers compensation usually pays for:

• Medical costs
• Lost wages during a worker’s time off
• Rehabilitation expenses
• Death benefits

Workers compensation usually does not cover:

• Client or vendor accidents
• OSHA fines
• Work safety improvements
• Wages for a worker who replaces the injured employee

Why You Need Accountant Insurance

Anything can happen—and to anyone.

The truth is, owning a business puts you at risk. In fact, 43% of small business owners say they’ve had to deal with a lawsuit or the threat of one. Even if you work in a “safe” home office, your clients or employees can get injured. You’re also handling your clients’ finances, which is a big job. Just one mistake could cost your business.

At first glance, buying accountant insurance might seem expensive, especially if you’re just starting your business. But you know the numbers—a claim could take your business down if you don’t have the right insurance in place.

At Simply Business, we want to protect you as you grow your accounting business. We know you face risks on the job, and we want to make it easy for you to get an affordable plan. Compare that to the costs you’d have to pay without a policy:

• $50,000 for reputational harm
• $30,000 for property damage or accidents
• $39,000 for injuries at work

You’re a potential target for lawsuits.

You may think a lawsuit would never happen to you, but over time, relationships with clients can change. People misunderstand one another and get emotionally involved in their finances. You never know how a client might react given the right circumstances.

You can also get sued by third parties, like mortgage companies, lenders, and your clients’ business partners. For example, if your client is unable to pay their bills, these third parties can go after you.

At Simply Business, we don’t want you to worry about potential claims. With insurance, you can enjoy peace of mind knowing your plan can handle the costs.