Tax Services insurance – cost and types of policies

Whenever you budget the expenses of your business, Tax Services insurance must be high on the list because you can’t always know exactly what can happen in the future.

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With the protection provided by insurance against accidents and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Tax Services enterprise, you must consider how much financial danger you are taking on.

If your Tax Services business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the consequences of their actions. 

Tax Services Insurance

In this article, we are giving very general guidelines for growing businesses to explain what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Tax Services business?

What this means, for any Tax Services business owner, is that if some person claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Tax Services business is not harbored by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sort.

When you are running your Tax Services operations, you can’t avoid responsibility for the consequences of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does Tax Services insurance protect you from?

For your Tax Services business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Tax Services business owner should know when negotiating the insurance needed.

The main headings of insurance for your Tax Services businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Tax Services business is dealing directly with other people, and that means you always have the danger that some accident can happen to them themselves or else something of theirs can be spoiled.

In such a case, they can demand compensation.

General liability insurance policy for your Tax Services business covers you against claims coming from injury to visitors or damage to their property.

It protects your Tax Services business from the claims themselves and also to any resulting court costs and legal fees of the lawsuits.

In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your Tax Services business would be with a upper limit of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Tax Services insurance operations.

Professional liability insurance for your Tax Services business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Tax Services business for them, you can quickly have to fight a monetary claim.

Even if the case against you is decided in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Almost all small Tax Services business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of Tax Services insurance section below for average prices of professional liability insurance for your Tax Services operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that what you delivered didn’t meet your description of function, or that your guidance was basically incorrect.

You need to understand the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held responsible for damages caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Tax Services

Only you can estimate exactly how much insurance you need.

Best advice is to contact experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Tax Services business

Take care! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the van is being used for business purposes.

The best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial truck policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is covered if your truck is involved in an accident.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The wanted value of the insurance is worked-out for the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your Tax Services business needs unique and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy everything needed to keep your Tax Services business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Tax Services business’ equipment.

Commercial Property insurance

Any Tax Services business that owns or rents space in a building should have a commercial property insurance policy.

If you own the property, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Any physical building location needs to carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Tax Services business operates in areas of high risk, like Florida or North Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where intense cold snaps can cause damage to outer coverings of Tax Services business premises, there is a need for more extra cover than in warmer climes.

Because the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Tax Services insurance section below to give some indication of the average prices per million dollars of property insurance for your Tax Services business.

Temporary insurance by month, week or day for your Tax Services business

Is your Tax Services business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Tax Services – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having adequate risk cover.

The important feature of short-term insurance is that you pay for the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Tax Services business

You have the chance to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will protect you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized Tax Services businesses, such as yours.

There are some limits that will rule whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle cover.

Also, the size of your business will dictate whether you are permitted to take out BOP cover.

The normal business that is allowed to take a BOP policy must have less than one hundred employees, and not more than five million dollars in annual turnover.

In addition, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Tax Services business employees

In almost all states, it is mandatory to have workers compensation insurance when your Tax Services business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only permit coverage from the government-run monopoly state funds.

In these states, you cannot obtain your workers compensation obligations from private insurance corporations.

Workers compensation rates are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Tax Services insurance level is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your Tax Services businesses needs.

Types of insurance Price range
Product liability insurance $286 – $746
Commercial insurance $816 – $2985
Equipment insurance $414 – $1368
General liability insurance $659 – $964
Commercial vehicle insurance $1723 – $2846
Public liability insurance $377 – $606

Cost of insurance for your Tax Services operations depends on many different factors.

We have estimated these figures for small independent Tax Services businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like New Mexico, they will be about 20%-30% less.

The location and size and type of your Tax Services business can have a big effect on the cost of different policies.

You should talk to professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Tax Services operations?

This is an umbrella term used to describe common insurance policies designed to protect Tax Services business owners from risks like bodily injury, property damage, claims of negligence.

Does my Tax Services business have to have insurance?

Some of the types of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Tax Services business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for Tax Services insurance.

How much will Tax Services business insurance cost?

On top of the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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