Bookkeeper Insurance Coverage Overview
What is a Bookkeeper?
According to the Canadian Bookkeepers Association, a Bookkeeper can be defined as the following;
One who maintains complete sets of books, keep records of accounts, verify the procedures used for recording financial transactions, and provide professional bookkeeping services. The term bookkeeper refers to a person who can complete a full set of books up to and including a trial balance.
Some of the common duties performed by a bookkeeper might include calculating and preparing cheques for payroll, supplier invoices, government remittances, completing and/or submitting tax remittance forms, setting up and maintaining financial records, and posting journal entries, just to name a few.
What Does Bookkeeper Insurance Cover?
Bookkeeper Insurance is tailored to the unique needs and exposures of bookkeeping. Even the best bookkeeper can make an error, miscalculation or omission of data, that can result in a client suffering financial loss.
Bookkeeping Insurance policies generally contain the following coverages;
The errors & omissions/professional liability portion of Bookkeeper Insurance Coverage policies are usually issued on a “claims-made” basis. What this means is that coverage is triggered when a claim is filed and you report it to the insurance company. Policies typically have a one-year term, with an annual premium and deductibles on a per-claim basis. In contrast commercial general liability coverage is almost always written on a per occurrence basis (click here for the differences).
Bookkeeper Insurance Coverage Claims Examples
- Tax Discrepancy: A bookkeeper was retained by 123 Company to prepare GST and PST statements for its client. The CRA issued a notice to 123 Company for certain tax discrepancies over the last 5 years. These discrepancies totalling over $175,000 were the result of certain misinterpretation of the Income Tax Act in regards to foreign sales. 123 Company brought action against the bookkeeper claiming that it sustained damages in the form of interest owed to the CRA due to the tax discrepancies, which were a result of the bookkeeper’s negligence.
- Unhappy Client: Allegations are brought on by an unhappy client who feels that they have been harmed by the bookkeepers’ actions, or lack there of. Even when such claims are frivolous in nature, defence costs can add up very quickly.
Contact An ALIGNED Advocate For A Bookkeeper Insurance Quote at 1-866-287-0448 Today.
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