Known also as errors and omissions (E&O) insurance, Accountants need professional liability insurance to protect themselves from claims of negligence, errors, or omissions that may arise from their professional services. 

• Errors and Omissions: If a client suffers a financial loss due to an error or omission in the accountant's work, they could file a claim seeking damages.
• Legal Defense Costs: Professional liability insurance covers legal defense costs, this includes attorney fees, court costs, and other related expenses.
• Settlement Costs: If a claim is settled out of court or a judgment is rendered against the accountant, professional liability insurance can help cover these costs.
• Client Trust: Insurance can enhance an accountant’s credibility and reassure clients that they are protected if something goes wrong.
• Regulatory Requirements: In some jurisdictions or for certain types of work, having professional liability insurance might be a regulatory requirement or a standard industry practice.
• Financial Protection: Without insurance, an accountant must cover the costs of a claim or lawsuit out of pocket.

Professional liability insurance provides a safety net that helps accountants manage the risks inherent in their profession and ensures they can continue to operate confidently.

The cost of professional liability insurance for accountants varies widely based on several factors but typically includes:

• Size and Type of Firm: Costs can differ depending on whether the accountant is a sole practitioner, part of a small firm, or a large accounting firm. Larger firms or those with a more complex scope of services might face higher premiums.
• Location: Insurance rates can vary based on geographic location due to regional risk factors and regulatory environments.
• Coverage Limits: Higher coverage limits generally result in higher premiums. Coverage limits refer to the maximum amount the insurance company will pay for a claim.
• Claims History: A history of past claims or lawsuits can increase premiums, while a clean record might help reduce costs.
• Services Offered: Accountants who provide specialized services or work in high-risk areas may face higher premiums.
• Deductibles: Higher deductibles can lower the cost of premiums, but they increase the amount the accountant will have to pay out of pocket if a claim arises.

Professional liability insurance and general liability insurance are types of liability insurance that provide coverage for different types of risks.

Professional liability insurance is insurance coverage for professionals to cover claims of negligence, errors, or omissions that occur while providing professional services. This type of insurance is designed to protect professionals from financial losses resulting from claims (legitimate or alleged) of negligence or mistakes made while providing those services. Professional liability insurance is typically purchased by professionals such as doctors, lawyers, accountants, architects, engineers, and consultants.

General liability insurance provides coverage for claims of bodily injury, property damage, or personal injury that occur as a result of business operations. This type of insurance is designed to protect businesses from financial losses resulting from accidents that occur on their premises or as a result of their business activities. General liability insurance may cover things like slip and fall accidents, property damage caused by your business operations, or advertising injuries.

Generally, professional liability insurance provides coverage for claims of negligence, errors, or omissions in the performance of professional services. Policies range in coverage limits, and the definition of “professional services." Each of these coverage factors will affect the annual premium pricing.  Policy limits are calculated or paid out differently based on policy.

Here are some examples of what professional liability insurance may cover:

• Legal fees and defense costs: If a client sues a professional for an alleged mistake while performing professional services, professional liability insurance can help cover the costs of legal defense, this includes attorney fees, court costs, and other related expenses.
• Settlements and judgments: If found liable for a mistake or error, professional liability insurance can cover the costs of settlements or judgments, up to the policy limits.
• Breach of contract: Professional liability insurance can cover damages resulting from a breach of contract between the professional and the client.
• Errors and omissions: Professional liability insurance can cover claims resulting from errors, omissions, or mistakes made while providing professional services to a client.
• Negligence: Professional liability insurance can help pay claims of negligence, such as failing to meet professional standards of care or failing to provide services in a timely or competent manner.

Professional liability insurance typically does not cover intentional acts or criminal behavior. In addition, policies usually have exclusions or limitations. It's best to have a licensed insurance professional review your quote options and help you compare various policies to ensure you are purchasing maximum coverage for the most competitive price.

Yes, Errors & Omissions insurance is a type of liability insurance that provides coverage for claims of negligence, errors, or omissions during the performance of professional services. It's another name for professional liability insurance or malpractice insurance.

While there may be some differences in the specific terms and conditions due to differing policies - errors & omissions insurance and professional liability insurance are terms generally used interchangeably to refer to insurance coverage that protects professionals from any claims of negligence, errors, or omissions that occur during the provision of professional services.

Alongside professional liability insurance, there are several other types of insurance that accountants should consider to protect their business:

• General Liability Insurance: General liability insurance provides coverage for claims of bodily injury, property damage, or personal injury that occur during business operations. This type of insurance is important for firms that have an office or meeting space where clients or other visitors may be present. 
• Cyber Liability Insurance: Cyber liability insurance provides coverage for losses resulting from data breaches, cyberattacks, or other cyber incidents. Given the sensitive financial information accountants handle, this insurance ensures accountants are financially protected in case legal action is taken against the firm due to a cyber-attack. 
• Employment Practices Liability: This insurance coverage is for claims of employment-related discrimination, harassment, or wrongful termination. 
• Workers’ Compensation Insurance: Insurance paid by the employer to subsidize compensation for lost wages and medical treatment for employees who’ve sustained injury or illness due to their job.
• Directors and Offices (D&O) Insurance: Protects the directors and officers of a company against claims of mismanagement, breach of duty, or wrongful acts during their managerial role.