Professional liability insurance, also called errors and omissions insurance, protects small businesses against the costs of client lawsuits over unsatisfactory work.
In finance and accounting, mistakes like bookkeeping errors or poor financial advice can lead to litigation. A lawsuit could significantly disrupt your business, so you should be prepared for the consequences. Professional liability insurance for accountants and other financial experts can help cover legal fees that might otherwise put your business in jeopardy.
Also called errors and omissions insurance (E&O), this policy covers:
In finance and accounting, a simple mistake can lead to financial loss for your clients. If a client takes you to court, you’ll end up paying attorney’s fees and court costs – even if the claim is frivolous. Professional liability insurance helps cover the cost of lawsuits caused by bookkeeping errors, missed items on a client’s tax return, and other professional mistakes.
Clients rely on your services to help maintain their financial health – and if you don’t deliver contracted services, they could take you to court. For instance, if you fail to submit a client’s tax return on time, the client could sue you in an effort to recoup an IRS fine. Professional liability insurance can pay for your legal defense and related expenses if a client files a lawsuit for a missed deadline or failure to deliver a service.
Allegations of professional negligence are an unfortunate reality for finance and accounting professionals. If your investment advice causes a client to lose money, the client can accuse you of negligence and file a lawsuit. E&O insurance pays for attorney’s fees and other legal expenses that result from an accusation of professional negligence.
Finance and accounting businesses pay a median of less than $35 per month for professional liability insurance, but you could pay more or less depending on your risks.
Insurance costs for finance and accounting professionals are based on a few factors, including:
While professional liability insurance covers missed deadlines and other mistakes made by finance and accounting businesses, it does not cover injuries, cyberattacks, and many other potential risks. Financial professionals should also consider:
General liability insurance: This policy covers common risks in the finance industry, such as customer slip-and-fall injuries and damage to client property.
Business owner's policy (BOP): A BOP combines general liability coverage with commercial property insurance at a discount to protect against common lawsuits and property damage.
Workers’ compensation insurance: Workers’ comp covers medical expenses and disability benefits for work-related injuries. It's required in almost every state for businesses with employees.
Cyber liability insurance: This policy helps finance businesses recover from data breaches and cyberattacks. It's strongly recommended for any business that handles personal information.
Commercial auto insurance: This policy is required in most states for vehicles owned by a business. It covers costs if your work vehicle is involved in an accident.
Fidelity bonds: Also called employee dishonesty bonds, fidelity bonds compensate clients in the event of employee theft. They're often required by client contracts.
Are you ready to safeguard your small financial business with professional liability insurance? Complete Insureon’s easy online application to compare quotes from top U.S. carriers. Once you find a policy that fits your needs, you can begin coverage in less than 24 hours.