Accountants and E&O Insurance: Is It Necessary?
As an accountant, you deal with sensitive financial information all of the time. If you make any mistakes, you could cause harm to your clients and anyone else impacted by that information. You have a responsibility to your clients not to make mistakes. Unfortunately, everyone makes mistakes. You need a backup plan for when things go wrong. You can find this in the form of accountants E&O coverage.
Most accountants have general liability coverage. This policy pays out in the instance of personal injury or property damage. It does not cover mistakes, however. Sometimes, you may give professional advice that goes wrong or you make a clerical error that leads to consequences for your client. In these instances, you need coverage that saves you in the case of a mistake harming a third party.
E&O coverage will help you pay any settlements or judgments you have to pay towards clients or affected party. It may also cover any legal fees or penalties that you have to pay. When you have E&O, it protects you and your clients.
Accountants work in a high-risk industry. Without accountants E&O, you may be setting yourself up for trouble. Insurance protects your business. E&O is crucial if you want to stay afloat in the case of a lawsuit or settlement.