Believe it or not, preparing taxes is a risky business. Every year, thousands of clients file lawsuits against their tax preparer. Some of these claims are baseless, and some are well-founded, but any of these suits can spell financial ruin for a firm. That’s why tax preparing businesses of every size should have professional liability insurance for accountants.
Certified Public Accountants know how busy tax season can get. Each April, you get buried in tax returns, receipts, and other documents. It’s easy to miss one deductible or even file someone’s return late. After all, you’re only human. Unfortunately, that one mistake can cost your client, who may sue you for damages in turn.
Professional liability insurance for accountants can protect your firm’s finances in the case of a lawsuit. Lawyers are expensive, and if you lose the case, you could owe the client millions of dollars. A great policy can cover up to $5 million toward this sum and your lawyer’s fees.
It’s important never to let this coverage lapse, even when it’s not tax season. A client can file a claim at any time of the year, and you must have insurance when they file to receive your benefits. If you handle taxes for individuals or corporations, talk to your agent to make sure you have the policy you need.