Business Insurance Requirements for Tax Preparers in Illinois

When tax season rolls around, business owners and individuals turn to you to help them file their return with the IRS. They trust you to double-check deductions and make sure their returns are filed accurately and on time. You are responsible for not only your customers’ taxes, but also sensitive personal information such as Social Security numbers. If something goes wrong, a client could sue. That’s why it’s a good idea to protect your business with tax preparer liability insurance.

There are several different business insurance policies you may want to consider for your practice. The first is general liability insurance, which can pay for costs related to third-party injuries and property damage. If you rent your office space, your release may require you to carry this coverage. Professional liability insurance is a key policy for certified tax preparers, since it can pay for lawsuits related to your professional services. Illinois business owners are required to purchase workers’ compensation insurance if they employ even one part-time employee.

Insureon makes shopping for insurance easy with industry-leading technology that gathers quotes from top U.S. carriers that fit your needs. Read more to find out which policies are most common for tax preparers in Illinois, and start an application to get your free quotes today.

Find the right insurance policy for your tax preparation business

The most common business insurance policies for tax preparers vary depending on a number of factors, including revenue, client contracts, and partnerships. The table below illustrates which policies might work best for your business type.

 

Business type General liability / BOP Professional liability Workers' comp Cyber liability
Sole proprietor X X   X
Partner X X   X
Contractor / freelancer X X X X
Employer X X X X

 

General liability insurance: Sometimes it seems like potential accidents are omnipresent when you’re a small business owner. If a client slips in your office, general liability can cover medical bills and legal expenses that may arise from a lawsuit. If you own your office space, a business owner’s policy (BOP) could provide both general liability coverage and commercial property insurance as a bundle – typically at a lower cost than if you purchased them separately.

Professional liability insurance: Working in the financial sector, you understand the importance of precision and accuracy. But no matter how many times you do the math, sometimes mistakes happen. If you or an employee makes a miscalculation during tax season, your client may pursue litigation. Professional liability insurance, also known as errors and omissions insurance, protects your bottom line so you can focus on tax returns.

Cyber liability insurance: This policy, also called cyber risk insurance, protects small businesses from expenses related to data breaches. If your business mishandles a client’s electronic information, you’re responsible for more than just legal fees; you might be required to provide credit-monitoring services, in addition to informing your client of the breach and doing damage control.

Illinois workers’ compensation insurance: If someone on your team experiences a work-related injury or illness, workers’ compensation kicks in to cover lost wages, medical bills, and more. In Illinois, all employers are required to purchase workers’ compensation insurance if they have at least one employee. Failure to do so could result in a minimum fine of $10,000 and other penalties. Even if you work alone, you still might want to purchase coverage to protect yourself and your income.

Business insurance costs for tax preparers in Illinois

According to an analysis of Insureon applications, the median cost of general liability insurance is just under $700 per year, which is on par with the national median. Illinois tax preparers can expect to pay about $1,000 per year for a business owner’s policy and $650 for errors and omissions insurance. The annual median price for workers’ comp coverage for tax preparers in Illinois is $770, which is about $150 more than the national median cost.

Median Insurance Costs for Illinois Tax Preparers

Save time and money with Insureon

Insureon’s industry-leading technology helps tax preparers in Illinois save time and money shopping for insurance by comparing policies from dozens of top U.S. carriers. Simply apply online and review quotes for the policies that best fit your business needs. Our insurance specialists are licensed in Illinois and can answer your questions as you consider coverage.

To make the application go even quicker, have this information ready:

  • Workforce details, such as the number and types of employees.
  • Current and projected revenue.
  • Business partnerships.
  • Insurance history and prior claims.
  • Commercial lease insurance requirements.

Apply for free tax preparer insurance quotes today.