Business Insurance Requirements for Tax Preparers in Texas

Texas is known for being friendly toward businesses, as well as economically solid. This environment means that there’s no shortage of work for tax preparers in the Lone Star State. But while you’re dealing with other people’s finances, it’s important not to neglect your own business needs. A costly lawsuit or unforeseen event can seriously cripple a small business. That’s why you need tax preparer insurance to protect you and your company.

Texas law doesn’t require insurance for most business owners. However, if you want to lease office space, your rental agreement may include requirements for general liability insurance and property insurance. Similarly, a client’s contract may require professional liability insurance. This policy, also called errors and omissions insurance, covers lawsuits where you’re accused of underperforming. Since Texas doesn’t require tax preparers to be licensed or certified, clients often prefer working with one who has professional liability for their own protection.

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

Find the right insurance for your tax preparation business

The most common policies for Texas 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 preparer’s 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 to cover recovery expenses. You may need this policy if you handle sensitive data such as credit card numbers, passwords, or Social Security numbers.

Texas workers' compensation insurance: Texas state law makes workers’ compensation optional for just about every small business owner, the main exception being construction companies with government contracts. But some Texas employers opt to get coverage. 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 Texas

Despite its business-friendly environment, some policies can be expensive in Texas. For instance, the median cost of a business owner’s policy (BOP) is higher in Texas than it is nationally by about $150 per year, according to an analysis of Insureon applications. Interestingly, general liability is less expensive than the national median by about the same margin. Combine your general liability and errors and omissions policies and the median cost is $1,173 per year, or approximately $98 per month.

Median Insurance Costs for Texas Tax Preparers

Save time and money with Insureon

Insureon’s industry-leading technology helps tax preparers in Texas 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 specialists are licensed in Texas 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.