Insurance for Tax Preparers

Every tax preparer needs Professional Liability insurance because it is a complex task they cannot do it on their own. It is your responsibility to give them the most accurate result possible. Professional Liability insurance protects your business and physical assets from claims of wrongful acts committed while performing your duties. It is your safety net when a client claims that you have committed a mistake while doing taxes.

Even the most careful tax preparer can make an error or omission while preparing their client's taxes. There are also state tax laws that change constantly. Your clients rely on you to do your job accurately. Failing to do so will result in a lawsuit that will risk your finances and the future of your business. Without insurance, you'll have to pay your own defense and the cost associated with the judgment against you.

When you are an individual contractor, a Workers' Compensation is not required. When you employ a team of tax preparers, this insurance for tax preparers is mandatory but only if you meet your state minimum number of employees. For more information about the state requirements for Workers' Compensation, please visit your state website.

As a tax preparer you must provide work as accurate as possible. When you have made an error or omission on your client's taxes, they may sue. Without Errors & Omissions (E&O) insurance, a lawsuit can put a huge dent in your finances. Some are forced to sell all their business assets just to pay their clients. There is also the cost of the defense and whatever you lose in judgment. Insurance covers out-of-pocket expenses as long as it meets your current limits.