Tax Preparers Insurance
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Tax Preparers Insurance Quotes
Professional liability insurance for tax preparers helps protect your tax preparation business or consultancy from risks not typically covered by general commercial liability policies. Just as medical practitioners need malpractice insurance tailored to their risks, you need professional liability coverage for tax preparers tailored to yours. Tax preparers professional liability insurance is an essential part of your comprehensive business insurance portfolio, whether you work from an office or out of your home. If you already have a policy, you should review it periodically to make sure it is up to date. As your tax preparation firm expands, it’s a wise idea to increase your coverage limits and reduce your exposure to claims.
You can get quotes for tax preparers professional liability insurance using the form shown at the top of this page.
Who Needs Professional Liability Insurance for Tax Preparers?
You need tax preparers professional liability insurance if:
- Your clients require it as a condition of doing business with you
- Your professional association requires it as a condition of membership
- You or your employees provide advice or services that could result in a lawsuit or financial loss for your client due to any alleged error, omission or wrong-doing on your part
- You have personal assets that could be jeopardized if a client sued you
What Professional Liability Risks Do Tax Preparers Face?
The number of tax audits have been rising steadily over the past few years. Even the most careful tax preparer can make a miscalculation or omit data. Add to that constantly changing tax laws at every level. Your clients are paying for your expertise. Fail to stay abreast of the most current, accurate information and you’re likely to be on the A-list of advisers to sue when a client suffers financial harm. Every year, thousands of lawsuits are filed in the U.S. against tax preparers. Regardless of whether you’re at fault, defending yourself against even a frivolous suit could mean financial disaster for you and your tax preparation business. Without professional liability insurance, you could be forced to sell off your personal assets to repay your client. You’d also have to pay for your own defense and any costs associated with a judgment against you.
What Does Professional Liability for Tax Preparers Cover?
Your professional liability insurance covers financial losses and the costs and damages resulting from law suits up to the limit of your policy. It is a variation of Errors and Omissions Insurance (also called E&O) designed specifically for tax preparers and tax preparation firms. It protects your business and personal assets from claims of wrongful acts (errors, omissions or negligence) committed by you or an employee while performing professional duties. It also covers the losses that happen to others in the exercise of your professional judgment, such as IRS penalties and interest for a miscalculated return. Professional liability insurance is a supplement to (and does not replace) Commercial Liability Insurance, Employment Practices Liability Insurance and Directors and Officers Insurance (if your business requires it).
Affordable Quotes for Tax Preparers Professional Liability Insurance
Policies for professional liability insurance for tax preparers and tax preparation firms are affordably priced. Quotes will depend on the size and type of your business. Your previous claims history and loss experience, staff turnover, financial results and operating characteristics can also affect your rate.
It pays to shop for specialized E&O insurance for you tax preparation business. You can get competitive quotes from one or more professional liability insurance companies by completing the form at the top of this page. If you do not wish to purchase coverage now, please leave your policy expiration date on the form provided. When your expiration date is closer, you will be contacted so that you can comparison shop for tax preparers professional liability insurance at that time.
Protect your business from exposure to risk. Get quotes for professional liability insurance now.
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Frequently Asked Questions (FAQs)
Get clear answers to common insurance questions and important details to guide your coverage decisions.
What is Tax Preparers Liability Insurance?
Tax Preparers Liability Insurance, also known as Errors & Omissions (E&O) insurance, provides coverage for claims arising from mistakes, missed deadlines, or negligence in tax preparation services. It helps protect tax professionals against financial losses due to errors that could result in client lawsuits.
Why do tax preparers need liability insurance?
Tax preparers handle sensitive financial information and must meet strict filing deadlines. Mistakes or missed deadlines can result in penalties, additional taxes, or IRS audits for clients, who may then file lawsuits. Liability insurance covers legal costs, settlements, and damages, safeguarding the preparer’s business and reputation.
What does Tax Preparers Liability Insurance cover?
The coverage typically includes legal fees, settlements, and judgments for claims related to errors, omissions, and missed filing deadlines. It may also cover professional negligence, such as providing incorrect tax advice or failing to file necessary forms on time.
What is not covered by Tax Preparers Liability Insurance?
This insurance generally does not cover intentional fraud, criminal acts, or punitive damages. Personal injuries or property damage claims are also excluded, which would require general liability insurance.
How much does Tax Preparers Liability Insurance cost?
The cost varies depending on business size, location, coverage limits, and client volume. On average, small tax practices may pay between $300 to $1,500 annually, with premiums influenced by deductible amounts and additional coverages, like cyber insurance.
Can tax preparers lower their liability insurance premiums?
Yes, tax preparers can reduce premiums by maintaining a low claims history, implementing quality control procedures, and increasing deductibles. Bundling E&O insurance with other policies, such as cyber liability or general liability, can also provide discounts.
How do I choose the right Tax Preparers Liability Insurance policy?
When selecting a policy, consider your client base size, service complexity, and potential exposure to risk. Consulting with an insurance broker specializing in professional liability for tax services can help ensure your policy covers necessary risks without excess cost.
