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As accountants are responsible for dealing with important financial documentation where a small error can cost a company dearly, they are exposed to the huge risk of being sued for professional mistakes.
Having accountant insurance will protect you and your business in the event of a tax return error or missed deadline. In addition, the policy will also assist in covering accidents that will have an impact on the business such as injuries or theft - but those are not as likely to happen for office-based businesses.
Why Do Accountants Need Insurance?
Accountants have to ensure precision, accuracy, and efficiency when working for a client. However, because of the high demand, mistakes are not uncommon and can result in legal action being taken by the client.
To protect the accountant from lawsuits and claims demanding reimbursement for financial losses as a result of misfiled tax returns, accountants are recommended to get accountants insurance.
Such a policy will not only cover the costs in the event of a lawsuit but will also provide decent coverage for medical bills, lost wages, and others in the event of an accident at the office.
Additionally, if an accountant loses important documents or is accused of being negligent or careless, an insurance policy in place will provide essential cover in the event of a lawsuit.
What Types of Insurance Do Accountants Need?
Accountants and accounting firms can benefit from a number of different insurance policies. Generally speaking, the coverage accountants go for depends on the size of their business, the type and size of clients they work with, the number of employees employed by the business, and more.
To find out the most recommended accountant insurance policies, please take a look below.
How Much Does Insurance Cost For Accountants?
Accountants typically take a wide variety of insurance policies to cover their business from all angles, and since every accounting firm is exposed to a slightly different level of risk, the premium from one company to the next is likely to differ.
Generally speaking, accountants throughout the United States pay an average of $45 to $50 per month or around $600 per year on CPA professional liability insurance. This type of insurance is especially important as it provides the company with the necessary protection in the event of delivering unsatisfactory work or if the firm is accused of negligence or sued for professional mistakes.
Accountants pay less than $30 per month or $350 annually for general liability insurance. This policy protects the accountant in the event of any third-party injuries, advertising injuries, or third-party property damage.
Cyber liability insurance costs less than $90 every month or $1080 per year. This policy is vital for accountants that deal with sensitive information providing coverage for legal expenses related to a cyberattack or data breach.
Accountants typically pay around $35 per month or $400 per year for worker’s compensation insurance. This particular type of policy will cover the employee's lost wages, medical costs, and other expenses in the event of an accident at the workplace.
Typical Insurance Claims For Accountants
Accountants generally claim insurance in the event of a professional mistake that has led to a lawsuit. In other cases, accountants also make insurance claims if legal action is taken against them for malpractice, negligence, loss of sensitive information, and others.
Regardless of the situation, having the appropriate insurance policy in place will shield your business from any unforeseen expenses and legal fees.