The most important insurances for tax consultants
As with all insurances, it is important for tax advisors to carefully review the scope of coverage and conditions of their insurance policies to ensure that they are adequately protected against the potential risks they may face.
Important business insurances for tax consultants are:
Professional liability insurance
This insurance provides protection against claims arising from errors, negligence, or other breaches of duty in the course of professional activities. It typically covers the costs of legal defense and damages.
General liability insurance
This insurance provides coverage for claims arising from injuries or damages occurring outside of pure professional activities, such as property damage or bodily injury.
Liability insurance for financial loss
This insurance is specially tailored to the needs of professional groups providing services and offering professional advice. It covers financial losses arising from errors or negligence in the provision of these services.
Cyber insurance
Since tax consultants often handle sensitive data of their clients, cyber insurance can be important to protect against cyber attacks, data losses, or privacy breaches.
The correct commercial insurance for tax consultants protects against these types of damage:
The most common insurance claims that can be brought against tax advisors often resemble those brought against auditors, as both professions are closely linked and provide similar types of services. Here are some common insurance claims against tax advisors:
Faulty advice or tax planning
If a tax consultant gives erroneous advice or carries out tax planning that leads to financial damage to his clients, claims can be made for negligence or breach of contract.
Incorrect tax returns
If a tax consultant submits incorrect tax returns for his clients, leading to additional payments, penalties or other financial burdens, claims for breach of duty or error can be brought.
Violation of professional duties
Tax advisors have ethical and professional standards that they must adhere to. A breach of these standards can lead to legal claims.
Liability to third parties
Third parties who rely on the tax advice or services of a tax advisor could make claims if they suffer damage as a result of the actions or omissions of the tax advisor.