Business Insurance Requirements for Tax Preparers in Michigan

Despite all of the economic positives for your Michigan-based tax preparation business, it still faces risks. That’s why small business insurance is a wise investment. Michigan state law only requires tax preparers to have one kind of coverage: workers’ compensation insurance.  However, you may find your clients expect more, especially since the state doesn’t require tax preparers to be licensed. Professional liability insurance, also called errors and omissions insurance, is one way you may be able to reassure them that you stand behind your work. Additionally, your commercial landlord may require you to carry property insurance and general liability insurance.

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 Michigan, and start an application to get your free quotes today.

Find the right insurance policy for your tax preparation business

The most common policies for Michigan 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: General liability insurance is the foundation of a tax preparer’s business protection. Coverage extends to bodily injury, client property damage, advertising injury, and the cost of legal defense. Most commercial leases require you to have this coverage.

Business owner's policy (BOP): Tax preparers sometimes qualify for a business owner’s policy. This package helps your business save money by bundling commercial property insurance with general liability at an affordable rate.

Professional liability insurance: Many clients require proof of professional liability insurance before entering contracts for professional services. This policy, also called errors and omissions insurance or tax preparers’ liability insurance, can help cover legal expenses if you’re sued for unsatisfactory work or a business discrepancy.

Cyber liability insurance: Cyber liability insurance helps tax preparation businesses survive data breaches and cyberattacks by helping with recovery expenses. You may need this policy if you handle sensitive data such as credit card numbers, passwords, or Social Security numbers.

Michigan workers' compensation insurance: Michigan state law requires workers’ compensation coverage for small businesses that employ three or more employees at once, or one or more workers for more than 35 hours a week for 13 or more weeks. If an employee is injured on the job, workers’ comp can help pay for medical fees and lost wages.

Business insurance costs for tax preparers in Michigan

Lower insurance premiums are another benefit of running a tax preparation business in Michigan, according to an analysis of Insureon applications. Compared to national medians, general liability, workers’ compensation, and business owner’s policies are all less expensive. Tax preparers’ liability insurance is the only one with a higher premium, coming in at $53 per month.

Median Insurance Costs for Michigan Tax Preparers

Save time and money with Insureon

Insureon’s industry-leading technology helps tax preparers in Michigan 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 Michigan 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.