In the world of bookkeeping, even minor mishaps can throw you off balance. A client could trip in your office, a misplaced decimal might skew their financials, or your laptop could be damaged on the go. But the right coverage can help protect your business from unexpected challenges that can disrupt your workflow. In 2023, a freelance bookkeeper based in Chicago faced a lawsuit from a client who claimed a filing error led to a $15,000 tax penalty. Fortunately, the bookkeeper had a professional liability policy through Hiscox.
- Every year, thousands of bookkeepers are sued in the United States for bookkeeping mistakes and other E&O claims, and the costs of defending and settling a claim can be substantial.
- In today’s digital world, cybersecurity threats are also a real concern, especially for bookkeepers who store or transmit financial data online.
- Specially trained in Direct Bill Processing, they handle complex transactions with accuracy and align their work with your agency’s financial strategy, ensuring seamless, reliable results you can trust.
- The errors & omissions/professional liability portion of Bookkeeper Insurance Coverage policies are usually issued on a “claims-made” basis.
- With increasing cyber threats and client expectations, even a small oversight can lead to significant legal or financial fallout.
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Plus, in today’s digital age, you’re handling sensitive data more often than ever. Every bookkeeper’s business is different, but several specific types of business insurance will help protect you from the most common risks. Let’s look at the main coverage types that’ll secure your business — and your peace of mind. The good news is protection for your business doesn’t have to be complicated. Whether you work as a solo financial professional or manage a team of bookkeepers, having the right insurance coverage helps you focus on what you do best. Tax season can be challenging for any business, but it can be especially complex for insurance agencies.
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Mistakes happen, but with the right insurance, they don’t have to define your future. Armed with a comprehensive E&O policy, you can protect your bookkeeping business from possible claims and continue doing business without the constant worry of damaging claims. The legal fees and settlements that could result from insurance bookkeeping an errors and omissions lawsuit can be especially damaging. Let’s take a look at some of the main reasons that bookkeepers need E&O insurance. In this article, we’ll cover everything you need to know about E&O insurance for bookkeepers, including what it is, what it covers, how much it costs, and some of the benefits of the policy.
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The best way to secure a good E&O policy is to contact a credible insurance broker. Additionally, it’s a good idea to go with a broker that offers custom insurance plans. This way, you can bundle E&O insurance with various other policies you need to get the most comprehensive plan. Additionally, when you purchase an insurance policy bundle, you’ll often get a better price when compared to purchasing multiple policies separately. Next, we’ll explore the various insurance options available to accountants to further mitigate potential risks. Next, we’ll address some frequently asked questions about insurance for accountants to further clarify your coverage needs.
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Remember that mistakes are part of life and will happen, but there’s no need to let them jeopardize your business. Having insurance for bookkeepers will help you can focus on helping your clients and growing your business. Having a claim filed against your business can be alarming and stressful, but know that once you have business insurance, you won’t have to accounting figure out how to deal with claims alone. Unsurprisingly, a business’s claims history is a major contributing factor to insurance costs. A company with a long history of costly claims will have to pay more for insurance than a business that has never had a claim.
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If you provide bookkeeping services digitally, you may think, ‘I won’t need insurance if I work exclusively online.’ But think again. Having an online business won’t protect you from potential claims of negligence or omissions and could expose you to other risks from hackers. But the essential services that bookkeepers provide also expose them to various risks. Because just like you wouldn’t go on a road trip without insuring your vehicle of choice, you shouldn’t provide professional services without business insurance. Berxi makes it easy to get the coverage you need with policies designed specifically for financial professionals.
What Types of Coverage Do Bookkeepers Need?
Ensure that it accurately reflects the unique aspects of your insurance business. Insurance companies should work closely with tax professionals who specialize in the insurance industry to ensure that their bookkeeping practices align with tax regulations and optimize their tax position. This includes comprehensive record-keeping and documentation to support tax filings and potential audits.
Risks Without Insurance
Make sure to also periodically review your risks and monitor for any new ones which can pop up at any time. It’s also worth noting that https://www.bookstime.com/ some larger clients won’t work with uninsured bookkeepers. Having the right insurance doesn’t just protect you — it adds an air of legitimacy that potential clients can see up front.