Question 1

What is a common misconception about Professional Liability (E&O) for Accountants & CPAs?

Accepted Answer

CPAs think 'we follow GAAP, so we're safe.' Most claims aren't about GAAP — they're about missed elections, late filings, communication failures, and clients' unrealistic expectations of tax outcomes.

Question 2

What happens if accountants & cpas don't have Professional Liability (E&O)?

Accepted Answer

You miss a Section 754 election on a partnership return; the missed step-up costs the partner $180K in future tax savings. Even if your error wasn't 'gross,' the partner sues. E&O defends and pays the settlement.

Question 3

What is a common misconception about Cyber Liability for Accountants & CPAs?

Accepted Answer

Tax prep firms hold the most sensitive PII a small business can hold — full SSNs, prior returns, bank routing/account info, and dependent SSNs. A single ransomware event can effectively close the practice during tax season.

Question 4

What happens if accountants & cpas don't have Cyber Liability?

Accepted Answer

Ransomware encrypts your tax software and 4 years of client files mid-March. Forensics ($30K), notification to 600 clients ($8K), credit monitoring ($45K), and 3 weeks of lost productivity during peak season ($90K) total $173K. Cyber pays — without it, your practice is gone.

Question 5

What is a common misconception about General Liability for Accountants & CPAs?

Accepted Answer

CPAs think 'we don't have customers visit much.' Even rare client visits create premises liability.

Question 6

What happens if accountants & cpas don't have General Liability?

Accepted Answer

Client trips on a loose carpet in the lobby — broken wrist, $14K medical. GL pays.

Question 7

What is a common misconception about Employment Practices Liability (EPLI) for Accountants & CPAs?

Accepted Answer

CPA firms think 'we're a small professional shop with all professional employees — we're safe.' Mid-size firms (15–50 employees) have disproportionately high EEOC charge rates.

Question 8

What happens if accountants & cpas don't have Employment Practices Liability (EPLI)?

Accepted Answer

A staff accountant fired for performance files an age-discrimination charge — defense costs $42K, settlement $65K. EPLI pays.

Question 9

What is a common misconception about Business Interruption for Accountants & CPAs?

Accepted Answer

CPA firms think their work is portable. Try doing complex returns from home with no records and no IT infrastructure during a 3-month restoration.

Question 10

What happens if accountants & cpas don't have Business Interruption?

Accepted Answer

Office fire in February closes the firm for 6 weeks. Tax-season revenue lost: $180K. BI with extended period of indemnity pays.

Accountants & CPAs Insurance Coverage Guide | RISKX