Accounting Professionals, Tax season is coming, do you have professional liability insurance coverage?

Suppose one of your clients is shocked to receive a hefty tax bill, and decides
you’re the one to blame? Or, what if a client is audited by the IRS and mistakes
are found in his return? In either instance, whether you’re at fault or not, you
could face a client lawsuit, steep legal bills and the threat of financial loss
from paying any settlement required by a court.
Professional Liability Insurance also known as “errors & omissions” insurance, covers
your legal defense if your client makes a claim against you, as well as any damages
you’re legally obligated to pay to your client caused by your alleged negligent
or improper advice, or other errors or omissions in your tax preparations.

Professional Liability Insurance for Tax Preparers & Accountants

Preparing taxes for private and public companies is a complex task requiring expert
knowledge of the latest tax laws. Clients rely upon their tax preparers to ensure
that they pay their legally required taxes – and only their legally required taxes
– in a timely manner.
Unfortunately, errors and omissions in tax preparation can occur. Clients become
understandably upset if they discover they have unnecessarily paid too much in taxes.
They become even more distressed if they face fines and penalties due to errors
that result in underpaid taxes. And they can get downright hostile should a tax
preparer fail to file taxes or amendments in a timely manner, resulting in penalties.
A large percentage of claims filed against accountants by their clients are related
to dissatisfaction with tax preparation services. Fortunately, Professional Liability
Insurance – also known as Errors & Omissions Insurance– is available and affordable
for most tax preparers.

How Accountant Professional Liability Insurance Works

Professional Liability coverage provides protection tax preparers need in the event
a claim is made against them alleging damages due to their failure to perform tax
services in a satisfactory manner. The PL Insurance policy typically covers, up
to the policy limit, both the cost of defense and any monetary damages awarded to
the claimant due to the tax preparer not performing up to the prevailing standard
of care.
Typically, PL policies are written in increments up to $1 million and aggregate
limits will apply, with deductibles available on a per-claim basis, usually starting
at $1,000. Policies may exclude coverage for specific acts and services.
Virtually every real tax preparer needs Professional Liability Insurance. Potential
damages can be great due to a claim that an error or omission in tax services resulted
in a large financial loss to a client.
Today’s Accountant and Tax preparers’ coverage can be surprisingly affordable and
an important feature that Professional Liability Insurance can provide is the legal
representation you need to defend yourself against claims of alleged negligence
as well as the financial resources necessary to pay any settlement or judgment against
you.

Standard Business Coverage

In addition to professional liability insurance, BOLT Insurance provides quick,
efficient access to a complete package of insurance products and services designed
to meet the risk management needs of Accountants, and Tax Preparers:
Business Liability Insurance Policy – Often called a Business Owner’s Policy
or “BOP,” a general liability package policy protects your company should a client
be injured on your premises, or if you or an employee causes an injury or property
damage at a client’s location. Also included in a BOP is coverage for direct damage
losses to your building and business personal property as well as loss of business
income.
Worker Compensation Policy – Required in many states, workers’ compensation
insurance provides medical and disability coverage for your employees in the event
of a work-related injury or illness. The employers’ liability component of most
workers’ compensation policies protects your company should an employee file a lawsuit
that claims that your company’s negligence caused his or her work-related illness
or injury.
Commercial auto Policy– This type of insurance covers certain legal liability
resulting from bodily injury or property damage caused by the vehicles used in your
business.
Umbrella Liability Insurance – Umbrella or “excess liability” insurance covers
claims that exceed the amount covered by your general liability policy. It may also
add coverage to your commercial auto policy and to the employers’ liability coverage
on your workers’ compensation policy. Coverage is triggered when claims exceed the
underlying insurance.
A licensed BOLT insurance agent will guide you through every step of the process
and will be there to service any other insurance needs you have.

The information provided in this material is intended to be general and advisory
in nature and should not be considered legal advice. Certain coverage and features
and vary by state and may not be available to all insureds. All coverages are individually
underwritten.