Wanted to get a feel for E & O insurance from you all. Any recommendations?
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E & O Insurance Recommendations?
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Insurance
We have a policy from Western Surety Company, with fairly basic coverage.
Aggregate Policy Limit = $20,000
Single Loss Limit = $10,000
Deductible = $500 Annual Aggregate
Deductible = $250 Single Loss
The annual premium is around $175. The premium is scaled based on the number of preparers working at the firm. The carrier allows this number to be changed during the policy year, so you can adjust it if you hire seasonal people during tax season.
They offer various options, including one or two years of retroactive coverage, and a rider for bookkeeping services. They also offer higher coverage limits.
It is a claims made policy, which means that coverage ceases if the policy is cancelled for any reason. This is very different from other types of liability insurance.
It means that a loss will not be covered unless the claim is filed while the policy is in force.
If you cancel the policy for any reason, such as switching to another carrier, or closing your business, the coverage simply ends. You are no longer insured, even for errors that you may have made while the policy was in force, but that have not yet been discovered.
This may be okay if you pick up a policy from another carrier that includes a couple years of retroactive coverage. You just need to be aware of what you are buying. This product is not unusual. Many malpractice insurance policies work this way.
This policy was offered to us through a marketing program sponsored by www.ptin.org, a for-profit website that claims to be a "national directory" of tax professionals. They attempt to list everyone with a PTIN, using data that is available from the IRS through the Freedom of Information Act. They are filling a void, because the IRS still has not provided an online database for the public. The website offers "premium listings" for a fee. We did not purchase a premium listing. The insurance appears to be available to anyone with a PTIN.
BMKLast edited by Koss; 04-11-2014, 04:10 PM.Burton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.
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E&O not B-O.....
I'd be interested to hear some more examples.
I have a small business - about 125 clients of varying type. Just a few 1065 Partnerships.
Any suggested links that I should/could read up more on what is/is not insured.
ThanksMatthew Jones
Tax Preparation
Computer Consultant
Tax Season is here!
Make sure everything is working, extra ink or toner is available, Advil in top drawer!
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