Insurance for Accountants

Accountants handle clients’ financial records. Their services are provided to either the general public or to a specific firm or group of firms. An accounting operation may provide general or all-encompassing financial services, or it may specialize in a specific area such as taxes, real estate or investments.

An accounting firm may or may not carry the Certified Public Accountant (CPA) certification. The need for the CPA certification depends on the type of work each accountant will provide and the purpose or type of financial statements the accountant will prepare for the client.

Combine general liability, property coverage and accountants professional liability insurance with a BOP.

Some accountants may also act as financial planners and offer investment advice. Due to the varied areas of knowledge or expertise needed for these activities, the background, education, certification, experience and professionalism are items insurance company underwriters consider when pricing professional liability insurance.

Coverages Recommended for Accounting Professionals:

✓ General Liability Insurance
✓ Professional Liability Insurance (E&O)
✓ Business Personal Property
✓ Hired and Non-Owned Auto
✓ Workers Compensation Insurance
✓ Business Income with Extra Expense
✓ Employee Dishonesty Bond

Other Coverages to Consider for Accounting Firms:

Accounts Receivable, Building (if owned by company), Computer Fraud, Computers, Directors and Officers Liability, Employment Practices Liability, Equipment Breakdown, Forgery, Money and Securities, Valuable Papers/Records and Employee Benefits Liability.

Common Risks and Needs Associated with Accountants

The risk factors accounting services professional liability include the services the applicant provides, the firm’s credentials and experience as well as the ratio of professional to clerical employees. Failure to conduct thorough background checks to verify credentials and education can pose a significant risk. The risk of E&O claims increase if clerical workers are allowed to do tasks that only the professionals should handle and if error checking procedures are inadequate.

Property risk is generally limited to that of a typical office, although there may be some incidental storage or an area for meetings. Most property claims arise from the considerable storage of customers’ records and computer equipment. Fire sources include electrical wiring, wear, and overheating of equipment.

Crime concerns for accounting firms comes from employee dishonesty, which can be quite serious as accountants and their staff have access to clients’ financial information such as bank records and investment accounts. Potential for theft, directly or by means of identity theft, is relatively high. The threat of dishonesty increase without proper background checks, along with monitoring procedures and securing of all records to prevent unauthorized access. All job duties, such as ordering, billing and disbursing should be separate and reconciled on a regular basis. Receipts should be issued for any cash payments received. Bank deposits should be made on a timely basis to limit the buildup of cash on premises. Internal audits should be performed at least annually.

Inland marine coverage can often include accounts receivable, computers and valuable papers, and records. The customers’ records on file may be originals that are difficult to re-create. Power failure and power surges are potentially severe hazards. A morale hazard may exist if firms do not keep valuable papers and disks in fireproof file cabinets to protect them from smoke, water and fire. Duplicates should be kept off site to allow for re-creation.

The risk of a claim is minimal since most operations are conducted on premises and most of the client contact is electronic or by mail. If clients visit the premises, they should be kept in waiting areas and designated conference areas so that they cannot view or overhear conversations regarding other clients’ confidential information. Off-premises exposures arise from sales visits, training sessions, and physical audits at the customer’s premises. There should be policies and training as to off-site conduct by employees.

Automobile exposure is generally limited to hired and non-owned coverage. However, if vehicles are provided to employees, there should be clear procedures in place regarding personal use by employees and their family members. The age, training, experience, and records of each driver, as well as age, condition, and maintenance of the vehicles, are all important items to consider if your business needs a commercial auto policy.

Exposure is generally limited to that of an office. Ergonomic concerns include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations. Some accounting firms have significant off-site work for audits, training and similar activities.

Business Liability Quotes for Accountants

General Liability Shop.com offers affordable liability insurance quotes for accountants and bookkeeping services throughout the U.S. Our accounting programs include all lines of business insurance, as well as our Target programs for business owners policies (BOP). Contact one of our business insurance Specialists today at (800) 900-8657, or start a quote online now.

Accountants Liability Insurance Classification Codes

Business Liability Category: Service Businesses

SIC Business Insurance Codes:

• 8721: Accounting, Auditing and Bookkeeping Services
• 7291: Tax Return Preparation Services

NAICS Liability Classifications:

• 541211: Offices of Certified Public Accountants
• 541213: Tax Preparation Services
• 541214: Payroll Services
• 541219: Other Accounting Services

Business ISO General Liability:

• 41677: Accounting/Consulting

Common Workers Compensation Class Codes:

• 8803: Accountant, Auditor; traveling
• 8810: Clerical; office only

We generally write Business Owners Policies for most accounting firms with less than 50 employees. We've found that a BOP often saves accountants between 15 and 20 percent on their coverage versus buying stand alone general liability, property coverage or professional liability insurance.