Independent accountants, tax preparers, and bookkeepers handle their clients' important and sensitive information. Their access to financial data exposes them to all kinds of risks, from allegations of negligence to cyber security breaches. Let's review the potential exposures your finance clients may face so you can find adequate coverage for them.
Based on the unique risks accountants and tax preparers may encounter, they should consider carrying the following policies:
General Liability Insurance
General Liability Insurance covers third-party lawsuits brought against your client for premises liability or property damage liability. Say, for example, a tax advisor's client trips over a welcome mat in the office. If the client suffers a bodily injury, they can sue the tax professional simply because the accident happened on their commercial property. When that happens, General Liability covers legal defense fees and settlements or judgments.
Professional Liability Insurance / Errors & Omissions (E&O) Insurance
Even the most meticulous finance professional can be sued for negligence or professional mistakes. Professional Liability Insurance shields your client from the high cost of a lawsuit when a disgruntled customer claims they suffered financial damages because your client provided incomplete or substandard service. Also called Errors and Omissions coverage, this policy covers the litigation costs associated with the claim, including attorney fees, settlements, or judgments.
Cyber Liability Insurance
The information your accounting and financial service clients handle makes them a juicy target for a online hackers. If your client stores sensitive third-party data on their computers, clouds, or networks, they should consider carrying Cyber Liability Insurance. This policy covers the financial fallout associated with a security breach, including the cost of notifying customers that their information was stolen. It can also pay for credit-monitoring services and a public relations campaign to refurbish your client's reputation.
Your client probably owns or rents office space, furniture, and equipment to keep their business running smoothly. If any of your client's business property is damaged in a fire, storm, or criminal act, Property Insurance can pay to repair or replace their insured assets.
Workers' Compensation Insurance
Even if your client has only one employee, they may be obligated to carry Workers' Compensation Insurance by their state's laws. Workers' Comp covers medical expenses and disability wages when your client's employees suffer occupational injuries. Most policies also include Employer's Liability Insurance, which covers your client's litigation costs if they are sued over the workplace accident.