Liability insurance for accountants: Why it matters

In a nutshell: An accountant covered by professional liability insurance is your safety net in case a mistake slips into your tax returns. It’s the first of more than 20 criteria that Bankeo checks before introducing you to someone. You don’t have to check anything or pay anything.

When choosing an accountant, we think about price, availability, and friendliness. We rarely think about insurance. Yet it is undoubtedly the most tangible protection you’ll have when something goes wrong.

What is professional liability insurance for accountants?

Professional liability insurance (often called “RC pro” or errors-and-omissions insurance) covers the consequences of a fault, error, or omission committed by an accountant in the course of their work. A poorly filled-out tax return, a missed tax credit, or a missed deadline: if this causes you financial loss and the accountant is held liable, their insurance may compensate you.

Without this insurance, your only recourse would be to take legal action directly against the accountant and hope that he or she has the means to pay for the damages. With it, there’s an insurer backing them up, and therefore a real ability to provide compensation.

Why it makes all the difference for you

Accountants are human, and even the best ones can make mistakes. The real question isn’t “Will they ever make a mistake?”, but “If it happens, am I protected?”

In practical terms, up-to-date professional liability insurance provides you with three things:

• A Real Line of Defence If a mistake costs you money (penalties, interest, tax adjustments).
• A Sign of Professionalism : A professional who carries insurance is a professional who takes their responsibilities seriously.
• Peace of Mind : If you’re going to entrust your financials to someone, you might as well make sure they’re covered.

In Quebec, CPAs who are members of the Order are subject to insurance requirements. But not all accountants are CPAs, which is precisely why it’s important to check on a case-by-case basis.

How to check it yourself (and why it’s a pain)

If you want to do it yourself, here’s what to do:

• Ask your accountant for a Certificate of Professional Liability Insurance up to date;
• Make sure it is valid (dates) and that the Amount of Coverage is sufficient for your situation;
• For a CPA, you can verify their status with The Order of CPA du Québec.

It’s doable, but it’s one more step to take, and you’d have to repeat it for every accountant you’re considering. Most business owners don’t have the time or the inclination to do this.

How Bankeo checks this for you

That’s exactly what Bankeo does for you, for free. Professional liability insurance is the top criterion for The Bankeo Trust Index : Before an accountant joins our network and is introduced to you, we make sure they are covered.

So there’s nothing for you to check. You describe what you need, we filter our network, and we present you with a vetted accountant, insurance included. You compare, you choose, and we’re here to support you every step of the way. You never pay Bankeo, you simply pay the fees of the accountant you choose directly to them.

Find a vetted accountant, insurance included. Get started for free.

In summary

• Professional liability insurance provides protection you, not just the accountant, in the event of an error.
• Not all accountants are insured the same way: it’s important to verify this with supporting documentation.
• Bankeo checks this for you, for free, as the first criterion for The Bankeo Trust Index.