The United States Bureau of Labor Statistics states there are more than 1.3 million accountants throughout America. Accountants are responsible for handling a broad range of very delicate fiscal information and are accountable for preserving sensitive documentation and electronic files.
Financial Professionals complete duties such as tax returns, financial audits, and accounting advice for individuals and businesses.
As you know, being a successful Accountant requires a high level of care. There are many opportunities for an Accountant to make a critical error.
A financial oversight can severely impact a client resulting in a long list of negative outcomes. Damages resulting from an accounting blunder may simply be a hassle of red tape or escalate all the way to government fines and jail time.
So how do you protect yourself and your customers if you make a miscalculation? Or misplace important paperwork? Or do not protect electronic documents from being compromised?
Accountant Liability Insurance is the answer! Liability insurance is necessary and an affordable investment to protect your business. Let’s take a closer look at how much you may pay for Accountant Liability insurance.
What Type of Liability Insurance Should I Buy?
Accountants, like yourself, typically buy a combination of Professional (Errors & Omission) Liability Insurance and General Liability Insurance. The policies are reasonably priced and provide cover for potential claims that may transpire.
Accounting professionals that perform the below tasks can benefit immensely from both E&O Liability Insurance and General Liability Insurance. Handling the following accounting duties can expose you to potential lawsuits:
- Tax Planning and Preparation
- Financial filings
- Litigation Consulting
- General Business Planning
- Personal Financial Planning
- Advice regarding State and Federal tax laws
See below for a better idea of the Accountants Liability Insurance options and what they can do for you.
- Professional (Errors & Omissions) Liability Insurance: is used by Accountants to protect them from allegations of negligence and incompetence. This Liability type can protect you and your business form inadvertent errors, omissions, or misinformation during the course of work.
- General Liability Insurance: is commonly known as “slip and fall insurance”. It is meant to protect you from general claims of Property Damage or Physical (Bodily) Injury that happens in your home or business office.
Remember, if you or Accountants who are part of your staff do something wrong and it costs a client money or causes them to lose money then you may get sued for damages. If that were to happen, your E&O Liability insurance would help pay for legal defense, court costs, and any financial settlements awarded to the client.
In addition, if a customer experiences physical injury or property damage while visiting your business premises, they may seek compensation. Your General Liability insurance coverage would safeguard you and your Accounting business from such claims.
The cost of lawsuits and liability claims can be an immense burden. If you don’t have the proper Accountant Liability insurance policies in place then you would have to come up with money on your own. Think of the toll on your professional and personal resources? How would you secure enough cash to see a liability lawsuit through?
What Will I Pay for Accountant Liability Insurance?
For Accountants like yourself, it all comes down to the dollars and cents. You probably want to know what you’ll pay for both Professional (Errors & Omissions) Liability Insurance and General Liability Insurance.
Providing the exact amount you will pay for cheap Accountant Liability Insurance is not so easy. The pricing of your policy is determined by a whole host of factors and is unique to the individual or business being insured.
Generally speaking, Accounts usually pay an average of $800 per year for Professional Liability and $450 per year for General Liability. If you think about it, that breaks down to less than $5 per day for potentially millions of dollars in Liability coverage.
The average premiums we talked about above are just that – averages! Again, your Liability pricing will be specific to your business and its individual risk rating factors
Factors That Determine the Cost of Your Liability Insurance:
Want to know more about the elements that will shape your Accountants Liability insurance premiums? Check out the list below.
Carrier’s Rates – Each insurance carrier establishes basic rates for their liability insurance products. Insurance companies that are more familiar with your industry and have many Accountants as insureds will most likely provide very competitive pricing.
Liability Limits – The dollar amount you pick will determine the maximum amount your liability insurance will pay-out. A good rule of thumb to remember: the higher the liability limits the higher your premiums.
This detail may encourage you to go with lower liability limits. However, we have to say that may not be the best response. In the event a claim surpasses your policy’s liability limit then you will have to pay out-of-pocket for the remaining costs. If that were to happen, you may regret opting for a low liability limit.
Deductibles – The rule of thumb for deductibles is “the lower your deductible then the higher your premium”. This is because the more money you are willing to contribute demonstrates how much risk you are willing to personally absorb. Paying a higher deductible amount takes some of the pressure off the insurance carrier and will afford you a lower cost insurance bill.
Information about your business – Do you own your own Accounting firm? Or do you work independently? How much revenue do you generate? How many years of experience do you have? What type of training or certifications do you possess? What type of accounting work do you perform? And is this work for individuals or businesses?
Claims History – If you’ve had previous liability claims then you may be considered a high-risk professional. Being without past liability claims means a better rate. This is true of all vocations. The insurance company figures if a lawsuit was filed against you before then it could happen again.
What Is the Next Step in Buying Accountant Liability Insurance?
Accountants are expected to be fastidious, knowledgeable, and professional. They are entrusted with confidential business documents, as well as personal finance paperwork. During the course of preparing hundreds of fiscal statements and filings, a mistake can potentially be made.
One error could result in millions of dollars owed to a dissatisfied client. Could your Accounting firm recover from paying such a large amount of money? Would you be prepared to forfeit your personal bank accounts, properties, and other assets to satisfy such an expensive liability lawsuit?
The easiest and most effective way to protect yourself and your Accounting firm is to buy Accountant Liability Insurance. By securing affordable Accountants Professional (Errors & Omissions) Liability and General Liability Insurance, you will have all the necessary safeguards in place to compensate a disgruntled customer and still remain financially intact.
As a good Accountant, you know that the bottom line is what matters most! So, feel free to go here and find out more about Accountants Liability Insurance options and pricing.