Why You Need Business Insurance as a CPA
Emily Sperry January 16, 2020
No matter what type of business that you own, there are certain types of risk involved. As a financial services professional, you are in charge of sensitive information, which can expose you to a higher level of risk. Losing records, damage to your building, and other common risks are all a bit more daunting when you are a CPA. For these reasons, it is important to make sure that you have the right business insurance in place.
What Type of CPA Insurance Does My Company Need?
When it comes to choosing the right insurance as a CPA, there are several things to consider. A business owner’s policy is a good place to start as this will protect your accounting firm in much the same way that a home insurance policy protects your house and personal possessions. In addition, a business owner’s policy will also help protect against liability claims and property damage lawsuits.
A quality business owner’s insurance policy will provide you with three types of coverage:
- General Liability: protects from lawsuits that claim your business caused property damage or bodily harm to an individual. For example, if a client is hurt while at your office, general liability will help cover medical expenses. In addition, general liability can help cover claims of slander or libel. This coverage does not cover liabilities regarding the professional services that you provided as these are covered under a professional liability policy.
- Commercial Property Insurance: protects the physical location of the business. It will also cover any damage to the equipment that is used in your office.
- Business Income Insurance: covers income that may be lost if your business cannot be operated because of damage to the property, such as damage caused by a natural disaster or fire.
Additional CPA Insurance Coverage
It is possible that your company will need more coverage than what is offered by the basic business owner’s policy. As a CPA there are several types of additional insurance coverage policies to consider.
Errors and Omission Insurance
A small omission or error can lead to major consequences in the accounting profession or at a CPA firm. If you overlook an expense when preparing financial statements, this mistake could cost the client thousands of dollars. Your client may file a lawsuit against the firm based on this mistake. Errors and Omission policies can help cover the cost of your defense as well as any settlements pertaining to the lawsuit.
Data Breach Insurance
As a CPA, chances are that you store data from your customers as well as your employees. The data can be quite sensitive and include financial records, social security numbers, credit card numbers, bank information, etc. If this sensitive data is lost or is stolen, data breach insurance can help pay the costs related to the data breach such as:
- Notifying individuals who are impacted by the breach
- Managing public relations
- Delivering good faith advertisements
Valuable Papers and Records Insurance
While most information is now digitized, as a CPA firm there is a good chance that you keep a large number of paper records as well. This includes papers that your clients provide you when you are helping them with their accounting needs. A Valuable Papers and Records insurance policy will help cover the costs involved to reproduce important documents if they are damaged in any type of disaster such as a fire or a flood.
If you are a CPA, it is important to make sure that you have proper insurance coverage for your business. We have been helping businesses get the insurance that they need for many years. Contact us today to get started on finding the proper protections for your company.