Your clients rely on you to prepare their taxes accurately and on time. After all, audits are expensive, and they want to avoid costly penalties. But here’s the truth: no matter how detail-oriented you are, mistakes can still happen. And even if a mistake isn’t your fault, you still will likely need to defend yourself if you’re accused of negligence.

Fortunately, professional liability insurance (PL) can protect you.

This type of policy is designed to cover the costs of a lawsuit, up to your policy limits. That can include hiring a lawyer, settlement fees, and any other litigation costs.

Think you won’t get sued? Unfortunately, it’s estimated that 43% of small businesses have ended up with a court case or the threat of one. Lawsuits are very real—and very common.

Here’s an example. Let’s say you make a mistake while preparing a client’s tax return, and the IRS conducts a time-consuming audit. Your client gets angry and sues you to cover the costs of the audit and a loss of revenue while working with the IRS.

Depending on the size of your client and the audit’s complexity, this can cost anywhere from $2,000 to more than $7,500 depending on the state you’re based in.

If you have professional liability insurance, your policy can cover some or all of these costs, including hiring a lawyer, obtaining evidence or witnesses, and more. This means you may not have to worry about the financial consequences or rely on your personal savings to pay for your case. It is important that tax preparers consider getting professional liability insurance.

Do you own an office or rent a space to meet with clients? If so, you’ll probably need commercial general liability (GL) insurance. This plan covers costs resulting from third-party accidents, property damage, and bodily injury to third parties, including clients and vendors.

General liability insurance may be considered critical for tax professionals, and here’s why: it can protect you from very expensive claims. In fact, the average customer injury or damage claim is about $30,000. Without general liability insurance, you may have to pay for those costs on your own. For many tax professionals, this could be enough to put their businesses at risk.

Consider this example. Let’s say a client walks into your office and trips over a stack of papers you placed on the floor. The client bumps his head on the way down, which causes an injury resulting in a visit to the emergency room.

If you have general liability coverage, your policy can help cover your client’s costly medical bills, plus legal costs if you get sued (up to your policy limit).

If you have full-time or part-time employees working for your tax business, you may be required to hold workers’ compensation insurance. Consider administrative staff, other tax preparers, and even students or interns. This type of coverage can cover you if one of these employees experiences an injury or illness on the job.

If you have employees, workers’ compensation insurance is usually a requirement. But it’s important to check to see your state’s laws first. It makes sense as workplace injuries are incredibly costly. In fact, the average work injury cost totals $41,000, and in 2018 alone, there were $170.8 billion of claims. Workers’ compensation insurance is an important way you can protect your business if you have employees.