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Errors & Omissions Insurance (Professional Liability) for Bookkeepers; How the CPB Canada member insurance program has you covered

As a bookkeeper, your profession is constantly evolving. While there is no formal regulatory body overseeing bookkeepers, there is a strong expectation for professionals to deliver efficient service and be accountable for their performance.

However, bookkeeping is not immune to errors. Clients may face financial setbacks due to perceived mistakes in their records, which could lead to complaints or even legal action.

Imagine finding yourself in such a situation:

Lindsay, a bookkeeper at an accounting firm, manages a client’s financial records. Due to errors in the records, the client incurs a significant tax penalty. Lindsay and the senior accountant are named in a lawsuit, with the client alleging negligence in expense tracking, insufficient record reviews, and poor financial oversight. The client seeks $300,000 in damages for financial losses and emotional distress. Fortunately, Lindsay has an Errors & Omissions (E&O) Insurance policy, which covers the cost of her legal defence and any settlement or judgment up to the limits of the policy.

Do you have the right insurance in place to protect yourself in a similar situation?

As a professional bookkeeper, you handle clients’ finances and could face claims of professional negligence, error, or omission. If a client experiences a financial issue they believe is due to your actions, they may seek to hold you accountable. That’s why hundreds of bookkeepers rely on CPB Canada’s Insurance program for protection.

As a CPB Canada member, you have access to:

• Exclusive Errors & Omissions (E&O) coverage tailored specifically for bookkeepers at a discounted rate
• Flexible policy limits, ranging from $500,000 to $5 million
• Automatic coverage extensions for issues like breach of copyright, intellectual property infringement, defamation, libel, and slander

Business owners can also rest easy knowing that the CPB Canada member E&O policy extends to cover the bookkeeper’s insured business name and its employees. This includes liability arising from professional services performed by subcontractors working on behalf of and under the supervision of the insured CPB Canada member.

For self-employed bookkeepers and business owners, securing E&O insurance may seem obvious. But even employed bookkeepers should consider their own coverage needs. Insurance policies can be complex, with many factors to evaluate, some of which are included here. A BMS broker can help you understand your coverage and guide you through the process.

• Does your employer’s policy extend to claims made against you, the employee?
• What are the coverage limits, and are they sufficient for your risk tolerance? Be mindful that limits may be shared with the business, its partners, directors, and employees.
• Does the policy cover the full range of your bookkeeping activities?
• Is there a deductible on the policy that you will be responsible for?

If your employer’s policy seems inadequate, if you work at multiple sites, or if you volunteer your services, you should consider securing your own E&O insurance.

For any insurance-related questions, or if you would like to discuss your individual practice circumstances, please contact a BMS broker at 1-844-200-7140 or email cpbcanada.insurance@bmsgroup.com. You can also find more information about the program here.

Please note that the examples used in this article do not represent actual claims or insureds. The scenarios described above are included to provide examples of common circumstances, allegations, and outcomes for claims involving CPB Canada members and associates participating in the insurance program. This article is for informational purposes only and should not be construed as being advice or exhaustive. BMS makes no representation, warranty or guarantee that use of this information will prevent damage or reduce your premium. Your insurance contract prevails at all times. Please consult it for a complete description of coverage and exclusions. Certain conditions, restrictions and exclusions apply.