Accountants Insurance & Bookkeepers Insurance

Though each business operates somewhat uniquely, accountants broadly share the responsibility of managing clients' personal and financial information. Not only are your clients trusting you to help them by providing tax and financial services, but they’re also trusting you to handle their information responsibly and to report their finances in an accurate manner. All in all, your clients are trusting you with information that, if put in the wrong hands, could ultimately change their lives forever.

So this raises the question of how can we reduce the amount of risk faced by the accounting service provider? The solutions are simple: risk mitigation procedures and insurance. Essentially, by utilizing appropriate procedures and insurance coverages, accountants can reduce their own liability and have greater confidence in executing their job function.

The problem is, recent data has shown that of professional service providers who are contractually required to carry Errors and Omissions (E&O) insurance, only 55% do so. For starters, not fulfilling a contractual obligation is generally not a good idea. Secondly, risk in this field is inevitable and by possessing the appropriate insurance, you can significantly reduce the potential impact of an incident. Given that the average total cost of an E&O lawsuit comes to $180K, these claims may impact your firm in quite a substantial manner without coverage.

Your insurance helps you in managing the risks that your business could face. If your business is faced with a lawsuit, for example, the insurance will cover all the expenses up to the limits of the policy. This means that your business and personal assets are protected.

Accountants face a unique set of risks. Below are some examples:

• Your employee made a mistake in entering data for your clients, causing financial damages. The client sues your business for the errors your employee made.
• Your office floods due to a burst pipe, destroying computers, documents and furniture.
• A hacker takes control of your infrastructure, steals all your customer data, then uses the data gathered to expose the sensitive information to the public.

The cost of insurance for accountants depends on the coverage needed, the number of employees you have and the size of your business. If you want to find out the cost of your insurance policy, you can apply for a free quote online or talk directly to our insurance experts.