As a bookkeeper, tax preparer, accountant or CPA, you’re dealing with your clients’ most intimate information. In terms of private info, you’re right up there with a priest, except that you can be sued for a whole slew of acts of negligence or incompetence. One unhappy client with the government on his back may be only too happy to blame you for his IRS audit in an attempt to recoup his losses. If you haven’t got it already, you really should consider professional liability insurance for accountants. A smart client may well insist that you carry this important type of liability insurance for small business.
By the way, if you’ve put off getting accountant’s liability insurance because you think the odds are against anything happening to you…bad calculation. After Enron, CPAs and accounting firms became highly visible targets for disgruntled clients. So much so that accountants business liability insurance quotes started to increase faster than a dot.com stock in the ‘90s. But even with higher premiums, it’s a small price to pay for professional peace of mind and it’s considerably less likely to bankrupt you than is defending a claim in court, even if the case has zip merit.
Like malpractice insurance for accountants, your professional accounts liability coverage will protect your assets. While your General Liability Insurance provides standard liability insurance coverage for work-place injuries, property damage and losses, the typical policy offers no protection against lawsuits directly connected to your professional activities.
Let’s take a look at a few scenarios that may convince you to start looking for accountants business liability insurance quotes now.
Scenario 1: An investor is thumbing through an annual report and really likes the balance sheet you or your company prepared. The investor plunks down a chunk of change on stock. Later, your numbers are shown to be less than righteous per Generally Accepted Accounting Principals. Guess who the investor can sue? Guess what your professional liability insurance for accountants covers?
Scenario 2: After years of preparing taxes for a difficult client, you get fed up with asking for backup records that never materialize. You send a letter to formally end the relationship, being sure to give the guy plenty of time to find a new tax preparation service. You forget about. The fired client doesn’t. He doesn’t file his taxes either, but he blames you for not filing an extension.
In both those circumstances and many, many more, if you had malpractice insurance for accountants, most of the costs associated with defending yourself and making any court-ordered restitution would be covered.