Whether you work as an independent accountant or own an accounting firm, your clients rely on you every day to keep their personal and/or commercial finances in order. Not only is this an important responsibility, but it also opens you up to a wide range of perils. Undoubtedly, you provide a valuable service to your clients and are diligent and excel at what you do. However, whenever finances are involved, even the smallest error or lapse in judgment can have monumental consequences. To mitigate these risks, it's essential that you have the right accountant insurance.
Ontario accountants don’t always do the same type of work, so it's important that your unique policy is completely tailored to your specific needs. That way, you can have peace of mind knowing you'll be properly covered in the event of a damaging allegation. Not to mention, whether you work from a home office or own a commercial space, accidents do happen. That’s where your trusted Morison Insurance Broker can help. We’ll help you protect your assets from theft, fire damage, and more with the right insurance policy.
Ultimately, accountant insurance is a type of business insurance package designed for professionals and firms in the accounting business. These insurance plans provide accountants’ professional liability insurance as well as other types of coverage to help protect them against liability claims, losses, and damages arising from unexpected events.
While you may have to worry less about physical risks than other industries, there are still many problems that could pop up throughout the course of your workday. For example, say you are filing taxes for a client, but you make a mistake. The client gets audited, and you land in a pool of hot water. The client may decide to sue you for financial damages. With the right accountant professional liability insurance, you will have the financial funds needed to settle any claims and cover legal expenses relating to it.
Another issue that could arise is if you miscalculate a client's annual revenue, suggesting they made more than they actually did. This could lead to financial losses down the line, and give the client grounds to sue you. Without the right accountant insurance, either of these situations could lead to serious financial expenses that could ultimately force you out of business if you aren't insured.
Accountant insurance protects you and your business from a range of professional risks and perils that may occur during your daily operations. Not only should you be insured for professional liability, but you should also consider protecting your commercial office space against a cyber attack, and more. Not to mention, if you have employees, it's up to you to protect them as well. While there are coverages you can purchase to help protect your employees' interests, it's also important to note that workers' compensation insurance is actually provided by the government.
Likewise, if you work from home, consider insuring your office space. While a house fire may be covered under your home insurance policy, replacing office furniture and business content may not be, depending on the policy. Since policies vary from insurer to insurer, it's best to have your Morison Insurance broker walk you through the specifics of your policy, so you can make sure there are no gaps and that you're adequately covered.
Any individual working as a public accountant should have the necessary insurance. In fact, many firms require accountants to have, at a minimum, professional liability insurance, as mandated by both CPA Ontario and CPA Canada. While we'll dive into this type of insurance further momentarily, it essentially covers you in case you're accused of losing a client's money due to your professional services. Ensure you protect yourself and your employees with the best accountants' insurance policy tailored to your needs.
CPA firms and individuals falling into the following categories need accountant insurance:
While you may be prepared to purchase, at minimum, accountants’ professional liability insurance, there is a range of other coverages available to accounting professionals that will offer further peace of mind. Remember, in the event of an accident or disaster that destroys your office or where you're facing a lawsuit, the expenses can be incredibly high. Having to pay for said expenses out-of-pocket is a stress most savvy business owners will choose to avoid.
No matter the size of your company, accountant insurance is essential for protecting you, your employees, and your assets. At Morison Insurance, we'll help you protect your company with an insurance policy that works for you. Each of our licensed, qualified brokers will shop around for the best policy possible, ensuring you can breathe easy knowing you're properly covered with the right business insurance for accountants.
Beyond the basics, there are many coverages available to accountants and those working in related fields. When you partner with a Morison Insurance broker, we'll ensure that your accountants’ insurance policy is created especially for your unique needs. Much like how you know the unique ins and outs of your different clients' finances, we know how to help you find a comprehensive accountant insurance policy designed to provide the best coverage possible.
Some of the popular types of accountants’ insurance coverage include:
If you don't own a commercial space but operate out of a home office, you still need insurance. Relying on your home insurance policy may not be enough if something were to happen to your home. In this case, you need a home-based business insurance plan to cover your office equipment and off-premise business interruption insurance. The latter protects you financially in case you're unable to work due to something happening to your home, provided the event is covered by your policy. A home-based business policy will also cover you for additional liability for clients, delivery personnel, and employees who visit your home office.
Some home insurance plans may allow you to include an endorsement for your home office, but not all insurance companies will offer this option. Speak to your experienced broker about what may be included under your current policy, and if you may need additional home office insurance for accountants.
Also known as errors and omissions insurance, professional liability coverage is one of the most important for accountants. Since you provide a professional service and often give advice to your clients, it's foolhardy to operate without professional liability insurance for accountants. In fact, it’s so important that CPA Ontario—the qualifying and regulatory body of CPAs, students in the CPA program, applicants, and accounting firms in Ontario—requires that every firm and professional offering services to the public carry it.
This coverage protects you from client claims alleging financial loss due to misconduct, negligence, failure to deliver promised service and due to bad advice. If you make a mistake or provide advice that winds up costing your client money, you could be in serious legal trouble. An errors and omissions policy will help offset legal fees—including settlements. Furthermore, this type of insurance can protect you against alleged advertising injury, depending on the accountants insurance policy. This is where a client feels your services were not delivered as advertised.
Professional liability may protect you against claims related to your professional services, but it won't protect you from third-party injury or property damage claims. For this, you need commercial general liability coverage. This policy provides financial coverage for legal costs in the event of a lawsuit due to third-party injury or property damage. For instance, say a client is on their way to your offices and slips and falls on ice on your premises. You could be held liable for their medical fees and may have to settle if found responsible for the injury.
If you own an office building, having to replace the building and/or its contents after an accident or natural disaster can be a devastating financial loss without the right insurance coverage. With commercial property insurance, your business office is protected against physical loss or damage to the property and/or its contents due to theft, vandalism or an external disaster like a fire. This policy can be a lifesaver, as rebuilding a commercial property can be incredibly financially taxing. It's important to note that not all policies provide coverage for certain risks, such as flood damage, so ask your Morison Insurance broker to clarify what is and is not included in your commercial property policy, and what additional endorsements for your accountants’ insurance may be recommended for your property.
If you work at a large accounting firm, then you should have directors' and officers' insurance. Also called D&O insurance for short, directors and officers liability insurance protects the personal assets of corporate directors and officers, as well as their spouses, in the event they are personally sued by competitors, investors, customers, employees, vendors, or other parties. This policy addition to accountant insurance is important because it protects your management from actual or alleged wrongful acts while running the company.
As an accountant, you're responsible for managing highly sensitive and confidential information. In our digital age, most of your clients' information will be found on the computer. If even one hacker infiltrates your system and finds this confidential information, the results can be devastating. However, with cyber liability insurance, accountants can protect themselves in the event that this valuable information is lost, a data breach occurs, or another cyber-related risk arises.
As a professional accountant, you are likely well aware of the possibility that the Canada Revenue Agency could assess you with third-party penalties (TPPs), and that those penalties can easily start at hundreds of thousands of dollars and, in theory, continue to climb from there. That's what makes civil penalties coverage such an important addition to the overall package of insurance for accountants. If you are assessed with a third-party penalty, the civil penalties portion of your accountants' insurance coverage will provide insurance compensation to pay the penalty, up to the limits listed on your policy. While this may not account for the entire penalty, it will help considerably to reduce the amount you are responsible for paying.
Throughout the course of your career, there will likely be many times when you need legal advice or services but don't necessarily want to file an insurance claim to access them. Legal expenses insurance for accountants is the perfect solution, as it gives you access to a legal hotline that you can call anytime to speak with an attorney and get advice on a wide range of legal matters, from small claims issues and employment matters to compliance with government directives and contractual problems. You can get the information and qualified advice you need from a licensed attorney, and you don't have to pay a service fee or file an insurance claim. Some types of legal expenses insurance also provide access to legal services, such as document review, and can cover part or all of the litigation process, including investigation, pleadings, discovery, mediation, arbitration, settlement, and appeal.
As an accountant, you may not need to use a vehicle for business purposes, as many accounting professionals have their clients visit them at their office. But if you do travel to your clients or need a company-owned vehicle for other work-related purposes, your personal car insurance policy won’t protect you in the event of an accident. It should be covered to ensure you have the legally mandated commercial auto insurance. Accountants who use a car for business purposes should speak to the expert brokers at Morison Insurance to ensure their vehicle use is adequately protected with the right insurance policy.
As we mentioned, there are many different coverages available to accountants beyond what is listed here, and different insurers offer different policies. Depending on your needs, you may want to include a few add-on policies, such as disability insurance and/or life insurance.
Some other types of accountant insurance coverage you may benefit from include:
If you are unsure about the type of coverage you need, ask your Morison Insurance broker. As your commercial insurance experts, we'll ensure you get the right insurance for accountants, whether you run a solo operation out of your home or are part of a large accounting company.
Technically, outside of industry and legally mandated coverage, such as auto insurance and accountants’ professional liability insurance, accountants and accounting professionals are not required to have insurance. That said, just about every professional will tell you that it’s a bad idea to go without proper accounting insurance.
Not only do most firms require you to have coverage if you work for them, but if you don't have insurance and make a mistake while working on one of your clients' finances, you could wind up in serious legal trouble. Without insurance, being forced to pay out-of-pocket for these legal costs can be financially devastating. Not to mention, you should also protect your office, assets and employees from the worst-case scenario with proper insurance.
While business insurance for accountants is not legally mandated by the government (with the exception of commercial auto insurance, should it be necessary), that doesn't mean it's not required at all. In most cases, accountants are required by their professional association, such as CPA Ontario, to have accountant professional liability insurance, and the association likely has rules about how much coverage is necessary for professional liability insurance. CPA professionals should consult with their association to make sure the liability coverage they purchase for their accountant insurance package is compliant with the association's requirements.
Finally, it's important to understand that many clients will simply refuse to work with an accounting professional who does not have the right accountants' insurance and will require you to provide proof of coverage in the form of a certificate of insurance. You will likely also be required to provide proof of property coverage before you can rent or lease a commercial space or borrow money, as without showing them an insurance certificate, potential lessors and money lenders may believe you are too risky to deal with.
The answer to this depends on your work and business practices. If you are a member of a public accounting firm, the firm is responsible for ensuring you are covered with accountant insurance in Ontario, as well as providing proof of insurance to the applicable regulatory bodies. But if you are not part of a registered firm and offer accounting services to the public, then you are responsible for ensuring that you have insurance. Accountant insurance, regardless of whether you are part of a firm or are a stand-alone CPA practitioner, must always include accountants professional liability coverage, but other forms of coverage will be dependent on your business needs. Speak to your Morison Insurance broker if you have concerns about your coverage.
Like with any insurance policy, there is no set rate for your unique accountants’ insurance. There are numerous factors that influence what the final cost will be, including, of course, what additional coverages and floaters you choose to add onto your policy. Other influencing factors include:
It’s important to be as detailed as possible when describing your business and discussing your need for accountant insurance. Ontario brokers at Morison Insurance will be able to take that information to find you policy options with not only the best coverage, but also at a great rate. We’ll also help you find ways to save on your accountant insurance premiums, so that getting insurance won’t break the bank.
When you choose to purchase insurance through Morison Insurance, we ensure the process goes as smoothly as possible. After all, we're taking on the work of shopping around for insurance rates—and we relish helping our clients find the absolute best insurance coverage for their needs. We want our clients to feel as comfortable and prepared as possible throughout the entire process. To that end, we believe preparation is key. While applying for an accountant insurance quote, your Morison Insurance broker is going to ask you a series of questions. By knowing your answers in advance, you can speed up the application process.
A few questions your accountant insurance broker may ask include:
While this is a brief snapshot of the questions we’ll ask, this gives you a better idea of the information you need to prepare when you sit down with our brokers to discuss your accounting insurance needs.
In addition to knowing what questions your insurance broker will ask in advance, there are also a few proverbial ducks in a row you should get organized before applying for insurance. This will likewise make the process much smoother. Be sure to gather the following information:
Malpractice insurance is another term for professional liability insurance, also known as errors and omissions insurance. This term refers to the type of coverage that will offer financial protection should you wind up facing a lawsuit due to allegations of negligence, malpractice, poor advice and failure to deliver services as promised (breach of contract). As explained above, accountant professional liability insurance is a mandatory form of insurance that all accounting professionals must carry. Speak to your Morison Insurance broker to ensure you have the liability coverage you need in your accountant insurance policy.
CPA Ontario does set minimum limits for accountants' professional liability insurance coverage, based on how many people are part of your accounting practice. That's because the more people working for a firm, the larger the risk of a professional mistake. According to CPA Ontario, these liability limits are:
Additionally, the maximum deductible for this coverage must be reasonable with regard to the firm’s revenue, and cannot exceed more than 50% of the required minimum limit. Firms also must set aside cash assets or equivalents that are at least of equal value to the deductible amount specified in the accountants’ professional liability insurance documents.
The firm or accountant must also maintain their professional liability coverage for at least six years following a member stopping public accounting practices or a firm’s merger, dissolution, or withdrawal. For more information on their accountant insurance requirements, reach out to CPA Ontario.
At Morison Insurance, we always put our clients first—and it shows through our loyal clientele choosing our services time and time again. We take great pride in providing outstanding services and finding the best insurance coverage available for our clients. As a family-owned and operated business, we treat all our clients with that same family-oriented mindset. We're in the business of building long-term relationships with all our clients, so you can have peace of mind knowing the Morison team is always in your corner when you need accountant insurance in Ontario. From ensuring you have the proper liability coverage for your accounting activities to ensuring your property insurance needs are met, you'll be glad you chose the Morison team!
To learn more about accounting insurance and to get in touch with our expert brokers, give our team a call at 1-800-463-8074. You can also inquire about a quote online.
