Tax Preparer Insurance

(Getting coverage has never been easier)

Written by Jessica Huneck
Written by Jessica Huneck

Jessica Huneck is an insurance writer from She began her writing career in 2011 and has since earned herself a bachelor's degree in English writing.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.

Couple speaking with their tax preparer

Tax preparers prepare tax returns for individuals and small businesses – which is no easy task with a federal tax code that takes 72,000 pages to explain. As a tax preparer, you have a huge responsibility to your clients to prepare and submit their tax returns correctly, and on time. 

Failure to do so could cost your clients, and in turn, you. To protect your business, and yourself, a comprehensive portfolio made up of a combination of business insurance policies is an absolute must-have.

Fortunately, our independent insurance agents are here to eliminate the hassle of searching on your own by walking you through a hand-picked selection of top insurance policies to cover both your business and your employees. 

But first, let’s talk more about the protection you need and why you need it.

Basic Tax Preparer Insurance Coverage

Tax preparers should work closely with an independent insurance agent to identify their exposures and determine the types of business insurance that they need to fill the gaps. Start by considering the following coverages:

  • Business owners policy (BOP): Combines coverage for major property and liability insurance risks. It’s perfect for small to medium-sized businesses that need comprehensive, affordable coverage. A BOP contains three primary types of coverage:
    • Property coverage: Provides protection for buildings and their contents, like computers, calculators, office equipment, and furniture whether it’s owned or leased
    • Business interruption coverage: Compensates for lost business income and pays for operating expenses if you have to temporarily close due to a covered loss (e.g., a building fire)
    • Liability coverage: Pays for bodily injury and property damage claims to third parties due to your negligence (e.g., a client injury at your office or damage to a client’s property while visiting their home)

You may also want to consider endorsements to your business owners policy or additional standalone policies that provide the following coverages:

  • Computers and media coverage: Also called electronic data processing (EDP) insurance, it pays for lost data and related lost income if your computers or network are damaged by theft, vandalism, viruses, or malware. 
  • Cyber liability insurance provides coverage from a data breach involving your business. It helps pay for the cost of notifying affected clients, public relations, and investigations. 

Save on Business Insurance

Our independent agents shop around to find you the best coverage.

What About Coverage If You Work From Home?

If you work out of your home full-time or even just part time, you may be uninsured or underinsured if you think your homeowners insurance policy has you covered.

A typical homeowners insurance policy limits coverage for office equipment to around $2,500 – not nearly enough to replace a computer, printer, phones, desk, scanner, office plants, or other equipment you need for tax preparation. 


Your homeowners policy doesn’t cover business liability, loss or damage of business records, and damage caused by business interruption.

If you have a home office, you have several options in order to make sure you have appropriate coverage:

  • Endorsement to your homeowners insurance policy. Tax preparers can add an endorsement to a homeowners insurance policy that provides more coverage for the home-based business or home office. This option is a nice fit for one-person businesses without a lot of valuable equipment or business-related visitors. The endorsement typically adds about $2,500 in business equipment coverage, plus some additional liability protection at an affordable price.
  • In-home business/home office insurance. Some insurance companies offer a specialty policy for in-home businesses or home offices. The in-home business policy includes certain features of business insurance policies designed for larger firms but sometimes with lower coverage limits. A typical in-home business policy provides $10,000 of business property coverage and a liability coverage limit typically between $300,000 and $1 million. It may also provide limited coverage for loss of valuable documents, accounts receivable, off-site business property, and use of equipment. 
  • Business owners policy: A BOP, as described above, is often recommended for home-based business owners who need more than $10,000 of business property coverage. It also provides liability coverage for customer injuries and business interruption coverage.

Tax Preparer Errors and Omissions Insurance

The most important coverage you need as a tax preparer is professional liability insurance, or tax preparers errors and omissions (E&O) insurance. Thousands of lawsuits are filed against tax preparers every year. Your E&O policy protects you if you’re sued for mistakes in your work. Consider these examples:

  • A client sues you after an audit reveals errors were made in his or her return.
  • After a tax return is filed, a client is forced to pay IRS penalties and interest due to a mistake in your services.

These types of claims are not typically covered under your general liability insurance. You might also be required to have this type of insurance by your clients or certain associations that you want to join.

Tax preparers E&O insurance provides coverage for costs related to your errors (e.g., IRS penalties and interest due to your mistakes) as well as costs related to your defense in a lawsuit (court costs, attorney fees, settlements and judgments) up to your policy limits.

Tax preparers professional liability insurance is generally affordable and absolutely invaluable in protecting you from financial devastation. Your premium is based on several factors including, but not limited to, the following:

  • Size and type of your business
  • Previous claims and losses, where applicable

Remember to update your tax preparers professional liability policy as your business grows and expands over time and you assume greater liability exposures.


Save on Business Insurance

Our independent agents shop around to find you the best coverage.

Finding and Comparing Tax Preparer Insurance Quotes

Our agents will review your needs and help you evaluate which tax preparer insurance coverages makes the most sense. They'll also compare policies and quotes from multiple insurance companies to make sure you have the best protection out there. They'll hook you up — in a comprehensive and affordable way.

What's So Great About Independent Insurance Agents?

Independent insurance agents excel at matching the most appropriate policy to the business in need. Shopping around for insurance policies can be tricky, confusing, and time-consuming, and an independent insurance agent's role is to simplify the process.

They’re also there to help make sure you get the absolute best deal, and the one that meets your unique needs. They shop and compare insurance quotes for you, and they'll break down all the jargon so that you understand exactly what you're getting.

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