Common Insurance Claims Made Against Accounting and Tax Firms

Accounting and tax firms handle sensitive financial data, prepare tax filings, and provide professional advice. While their services are vital, mistakes or oversights can lead to serious consequences. Understanding the most common insurance claims in this sector helps CPAs, bookkeepers, and tax preparers proactively protect their businesses.

1. Errors and Omissions (E&O) Claims

One of the most frequent claims against accounting and tax firms involves professional errors or omissions. This can include:

• Miscalculations on tax returns

• Incorrect financial statements

• Missed filing deadlines

• Misinterpretation of tax laws

E&O insurance (professional liability) is designed to cover legal fees, settlements, and damages arising from these claims. Even a small oversight can result in significant financial liability, making coverage essential.

2. Cyber Liability and Data Breaches

Accounting and tax firms store highly sensitive client information, including Social Security numbers, bank accounts, and payroll data. Cyberattacks, ransomware, or accidental data exposure can trigger cyber liability claims. Insurance that includes cyber coverage helps manage breach notifications, legal costs, and potential fines.

3. Client Disputes

Sometimes claims arise not from outright errors but from client dissatisfaction. Examples include:

• Allegations of poor financial advice

• Disputes over fees or contract terms

• Claims of incomplete or delayed services

These disputes can escalate to lawsuits, and insurance coverage can provide legal defense and settlement funds.

4. Employee-Related Claims

Accounting firms with staff may face claims related to:

• Workplace harassment or discrimination

• Employee injuries (covered under workers’ compensation)

• Mismanagement of payroll or benefits

These risks highlight the importance of a comprehensive insurance portfolio for your firm.

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How to Protect Your Firm

Understanding these common claims emphasizes the need for tailored insurance coverage. Wexford Insurance specializes in accounting and tax firm policies, including professional liability, general liability, cyber coverage, and workers’ compensation. Request free accounting insurance quote from Wexford Insurance

Conclusion

Accounting and tax firms face a variety of risks, from errors in financial work to cyber threats and client disputes. Knowing the most common insurance claims helps firms plan and maintain adequate coverage. Wexford Insurance provides customized policies designed to protect your firm from these risks, ensuring business continuity and peace of mind.

FAQs

1. How can I compare accounting business insurance quotes effectively?

2. Why do accounting firms need professional liability insurance?

3. How can accounting firms lower their business insurance premiums without reducing coverage?