Before you set up practice as a certified public accountant, it is a good idea to look into the types and amounts of coverage you need for legal purposes as well as what is recommended for the size of practice you are opening. CPA liability insurance is usually the bare minimum that your local, state and federal regulations will require and will cover errors and omissions claims. Depending on whether you own or rent your office space, you may have other types of insurance plans for your company.
Liability insurance for CPAs will usually cover errors and omissions claims. These claims are made in civil court when a client feels that your negligence has caused him or her damage. If the court sides in the client’s favor, you will be responsible for covering the damages ordered by the court. With the right insurance coverage, these damages are less likely to bankrupt your practice.
CPA liability insurance is usually required in order to open up a practice, but that doesn’t mean that it’s not incredibly useful to have. This coverage will help cover damaged from negligence claims and civil lawsuits from your clients. You can find this type of insurance by sitting down with an agent and going over the relevant risks and benefits to design the right plan.