Professionals who prepare taxes for their clients undergo a unique risk in their profession. Many individuals can simply purchase a general liability policy for their business and be done with it. But a Tax Preparation professional must also buy an Errors and Omissions Insurance Policy (aka Professional Liability Insurance), not just to protect their own business, but also to protect their clients. Many of your clients or professional organizations will require you to buy an E&O Insurance Policy in order to do business with them. It may not even be a mistake you yourself do, but may be from one of your staff members or employees.

The IRS has very little forgiveness when it comes to Errors and Omissions. A simple slip of the pen can cost you tens of thousands of dollars, or even worse, your business, or jail time. IRS Tax Audits are a serious risk to your business. Even if there were no errors on the return, you will still have to spend valuable time and effort to defend your calculations. Your stress level will be greatly reduced by your confidence in the fact that you were smart to purchase an Errors and Omissions Insurance Policy well before you needed it. Tax laws change yearly. It’s difficult to stay abreast of every change and nuance. Lawsuits are common and expensive. Even frivolous lawsuits can cost you all of your savings and business assets to properly defend yourself. Remember, you don’t have to actually even make an error or omission in order for a client to try to sue you. Many frivolous claims and lawsuits are filled every day nationwide against very competent, consciences, and professionals like yourself.

Here are a few ways you may reduce the likelihood of a claim, potential claim, or lawsuit against you or your business:

• Select your clients wisely. Don’t be too quick to take on a new client. Interview them and be cautious if your get that “something just doesn’t feel right” feeling.
• Match your firm’s expertise with your client’s needs. Make sure you are the best fit for the client’s individual needs and requests. A bad choice could cause you problems in the future.
• Is the client honest and ethical in their accounting? If they are asking you to do something you don’t feel comfortable with, be firm and say NO. You are responsible for more than just your business income. It’s also your reputation that’s on the line.
• Always use an engagement letter. That way everything is in writing and agreed upon before any services are rendered.
• Outline clearly what your firm will and will not do for your clients. Create realistic expectations up front. Ensure your clients understand your services before you start anything.
• Outline your requirements for your client’s assistance. Tell your clients what information you will need for them in order to accomplish your job. Make sure they understand that your relationship is based on their participation and information delivery in a timely manner.
• Offer realistic deadlines and completion dates. Don’t ever over promise and under deliver. Make sure you give yourself plenty of time to accomplish the job properly. A client is always happy when you are able to finish early.
• Outline in writing your company’s fee schedule and payment process. Nobody likes surprises, especially when it comes to money. Be clear and direct in what it will cost, and how and when they must pay you. You should even have late fees outlined for their review.
• Document everything! Make sure you protect yourself and your company by writing everything down. You never know when you may need it to explain the details to your client or in a courtroom. Save all emails if possible.
• When in doubt or have a question, always ask an expert or more seasoned professional what they think before you just wing it or blaze ahead. A little homework can save you a lot of time, money and frustration.

An Errors and Omissions Policy from ACE Financial Group Ltd can protect your business from a lawsuit that may otherwise result in the loss of your business, assets, and possibly even your freedom. Our quick and easy online quote and application process will allow you to apply today and receive your Certificate of Coverage tomorrow. Buying and E&O Policy is just smart business, and the peace of mind you and your business deserve.