You have general liability insurance and, if you own your office building, you have commercial property insurance as well. You also have employer’s liability coverage and worker’s comp for your employees. Everything’s protected, right? Not if you don’t have CPA E&O insurance. Bookkeepers, accountants and accounting firms get sued every day. A lawsuit disrupts your business and has serious financial repercussions – even if you aren’t found negligent!
CPA Insurance FAQs
#1 What Is CPA Insurance?
CPA insurance, often referred to as accounting insurance, accountancy insurance or account insurance, is insurance that protects accountants, bookkeepers and accounting practices from lawsuits if someone in the firm makes a mistake in the course of serving and/or advising a client. In insurance-speak, it’s known as errors and omissions, or E&O insurance.
#2 Why Does a CPA Need CPA Insurance?
Accounting professionals face risks every day simply by providing their services. Something as straightforward as missing a filing deadline can result in penalties to clients, who then sue you for damages. Solo practices and firms of every size are exposed. CPA E&O insurance coverage protects you from such lawsuits.
#3 What Kind of Professional Liability Insurance Does a CPA Need?
Bookkeepers, auditors and accounting firms need CPA liability insurance that protects them from performance-related lawsuits arising from claims such as violating standard accounting practices and rules, inaccurate advice, errors and/or misleading statements. A minimum of $1 million of professional liability insurance coverage is generally enough to cover legal fees and damages.
#4 What Is CPA E&O Insurance?
Errors and omissions (E&O) insurance is essential for CPAs, bookkeepers, tax preparers and accounting firms. Also known as professional liability insurance, this specialized coverage protects you and your firm against claims of negligence if you make a mistake or provide inaccurate advice that negatively impacts another person or company financially.
#5 Does Professional Liability Include General Liability?
No. Professional liability and general liability cover different risks. Here’s an easy way to remember the difference: Think intangible vs. tangible. Professional liability insurance protects you against lawsuits relating to performance (missed filing deadline, incorrect advice, breach of confidence, etc.). General liability insurance protects against property damage or physical injury claims for incidents that occur during business operations.
#6 How Much Does Professional Liability Insurance Cost for a CPA?
Several factors affect the cost of CPA liability insurance coverage. These include the size of your practice, annual revenue, where you’re located, your claims history and coverage limits. Since accountants are exposed to lower risks than say a general contractor, their E&O insurance rates are typically lower. A good rule of thumb: $500 to $1,000 per employee annually.
CPA E&O liability insurance comes in all shapes and sizes, making it tricky to find the correct coverage. Because it’s so highly specialized, it’s important to work with a broker dealer who has a proven track record providing CPA E&O insurance to clients with complex risk management needs. Purchasing your CPA E&O liability insurance from the same agent who sells you your general liability coverage could leave you seriously unprotected.
JAISIN Insurance Solutions has that track record. For years, the company has been providing clients worldwide with CPA E&O insurance and combining their other liability products (e.g., EPL, general liability and worker’s comp) to reduce the number of premiums and save money.
Contact us today andand talk with one of our advisors about cost-effective CPA E&O insurance coverage customized to your needs. Tel: 888-509-0062 Email: Sales@jaisin.com. As always, our primary goal is to help you protect what’s yours.