Insurance for Accountants: What to Do When Renewing Your Policy

Like most small business insurance policies, an accountant’s insurance policy is typically valid for one year before you receive a notice from your broker or insurance provider that it’s due for renewal.

The renewal notice you receive (usually by email) should arrive in your inbox at least 30 days before your policy expires. It provides the perfect opportunity to revisit your coverage and see if you can get a better rate.

It’s wise to think about what level of protection an accountancy or independent accountant needs. 

Before renewing your accountant insurance policy, it’s crucial not to rush into it. Take the time to shop around and compare rates. Partnering with a Zensurance broker can often result in more comprehensive coverage without a premium increase, or even a lower annual premium for the coverage you need.

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9 Things Accountants Should Review Before Renewing Professional Liability Insurance

Accountants know they need professional liability insurance. Also called errors and omissions (E&O) insurance, professional liability protects accounting professionals against claims or lawsuits alleging financial loss due to a service you provided, negligence, misconduct, or failure to deliver services as promised. 

Here are nine things every accountant should consider when their professional liability policy comes up for renewal:

1. Review Coverage Limit

Thoroughly review your existing policy and its overall coverage limit. 

Insurance serves as the foundation of risk management, which makes reviewing your policy and its details vital to ensure you have the necessary coverage and be certain that any new risk exposures your firm faces are accounted for in your new or renewed policy. Also, if you have unreported claims, file a claim before your existing policy expires to prevent complications later.

2. Know the Policy’s Exclusions

All insurance policies contain exclusions – a provision that removes coverage for certain risks, hazards, or events and outlines what is not covered by your policy. They are designed to help keep the price of premiums affordable. Exclusions can vary between policies. Knowing what things you are covered for and what a policy excludes is critical. 

3. Understand Claims-Made vs Occurrence-Based Coverage

A claims-made policy is one that protects you from allegations or claims made while your policy is active, regardless of when the insurable incident occurred. An occurrence-based policy provides coverage as long as you were insured when an incident occurred.

Ensure the policy aligns with your accountancy business’s structure and check the tail coverage insurance options for potential gaps. Tail coverage insurance is an extension that covers claims made against you that were only reported after your policy expired or was cancelled.

It’s also important to understand the policy’s retroactive date.

If you have held continuous coverage without any gaps, your retroactive date can cover you should a claim arise from a past client. If you held five years of professional liability with a separate brokerage, the retroactive date can be honoured with a new brokerage, so if a claim arises from those five years, you will still have coverage.

4. Consider Changes in Your Services

Nothing stays the same in our professional journeys. Examine what’s changed at your firm or what new services you provide. For example, if you launched a new service or line of practice, merged with another firm, hired more employees, or invested in new technologies or equipment, your policy should address all of it. 

Furthermore, if you’re aware of future business or investment plan changes, share that information with your Zensurance broker so they know and will ensure your policy accounts for those changes.

5. Review the Deductibles

You can select the policy’s deductibles. A deductible is your share of the cost for damage or loss when you file a claim with your insurance provider. Generally, a higher deductible means a lower annual premium, but choosing high deductibles means facing higher out-of-pocket costs when filing a claim before your insurer pays out.

6. Prioritize Coverage Over Cost

Accountancies and independent professionals must watch their bottom lines and look for cost savings wherever they can. However, an insurance policy is an investment that shouldn’t be downgraded to save a few bucks. Being underinsured isn’t worth the risk. 

7. Align With Regulatory and Compliance Requirements

Be aware of frequent compliance- or regulatory-related changes or issues like your customers’ data security or Canada Revenue Agency reporting requirements. Ensure your coverage aligns with the licensing requirements in your province or industry.

8. Know Your Insurance Claim History

Insurers consider a business’s or professional’s insurance claim history when pricing an insurance policy. 

Review your claims history, and check your accountancy’s existing coverage to see if there are any conditions around the time required for reporting an incident or potential claim. Understanding these requirements can help avoid the possibility of being denied coverage.

9. Speak to a Zensurance Broker

Have a conversation with a Zensurance licensed broker about your coverage requirements and concerns. 

Our insurance experts can help review your existing coverage, examine what’s changed for your business in the past year, and make recommendations to help ensure you’ve got the liability protection your accountancy practice needs.

What Other Types of Insurance Do Accountants Need?

A comprehensive accountant insurance policy may include these additional coverages to complement professional liability insurance protection:

• General Liability Insurance

General liability insurance, also referred to as ‘slip-and-fall’ insurance, covers claims of third-party bodily injury and third-party property damage caused by your accountancy arising from negligence or unexpected accidents.

• Cyber Insurance

An accountant’s insurance policy should include two types of cyber insurance: cyber liability insurance and cybercrime insurance.

Cyber liability insurance helps manage the fallout after a cyber-attack, covering costs related to legal responsibilities, data breaches, customer lawsuits, and regulatory fines.

Cybercrime insurance offers proactive financial protection to help prevent and cover losses from online criminal activities. It includes protections against funds transfer fraud, social engineering scams, theft of digital assets, ransomware payments, and phishing and spoofing attacks.

Need Professional Liability Coverage for Accountants? Here’s How to Get Value for Money

Get the adequate professional liability protection you need at a favourable price by filling out an online application for a free quote from Zensurance.

With more than 50 providers in our partner network, our friendly broker team are insurance experts who will take the hassle of renewing or buying a new policy by finding the low-cost protection you need and customizing the policy to suit your requirements.

– Updated December 18, 2024.