A missed deduction is an apology, and a missed deadline is a claim. The policy is priced for the second one.Founded by an agent who has written professional liability for large accounting and law firms.
A tax preparer needs professional liability (E&O) for errors that cost a client penalties and interest, and cyber, because the FTC treats a tax preparation business as a financial institution that must keep a written security program; in California a registered preparer also needs a $5,000 tax preparer bond. A tax preparer is sued for the number that cost the client money: the deadline missed, the credit not claimed, the return filed with an error the IRS found. Professional liability for tax preparers is a small, specific policy for that exposure, and the second policy a preparer needs is cyber, because a preparer's files hold every client's Social Security number and the IRS requires a written security plan to hold them. We place both for enrolled agents, seasonal preparers, franchise offices and bookkeepers who prepare returns, and the application is short.
Tell us the situation.
One licensed human replies the same business day — not five agents, not an auto-responder. If the policy you have is already the right one, we will tell you.
We use this to quote and service your insurance, and we do not sell it or pass it to lead networks. Privacy policy.
Your malpractice policy gets read by someone who has placed it for big firms.
Kevin Kelsey
Founder | Principal Agent
Boring’s founder, Kevin Kelsey, has written professional liability for large accounting and law firms. So the retroactive date, the tail and the definition of the services you perform get read by someone who has placed these policies where the stakes were large. A sole practitioner or a small office gets that same reading. Before insurance he edited television for fifteen years and handled compliance and risk for large production companies, and he writes software, including the platform this agency runs on.
Send us what you have. We’ll tell you if it’s right.
Your current policy paperwork, a renewal notice, or nothing at all. A licensed agent reads it and replies the same business day.
What tax preparer businesses actually need.
Professional liability (E&O)
Claims that your tax work caused a financial loss: penalties and interest from an error or a missed deadline, a missed credit, wrong advice, with defense.
Without it — The client's penalties are your claim, and the IRS penalty notice arrives a year after the return.
Cyber and privacy
Breach of client records, a fraudulent refund diverted by a phishing email, ransomware on the office computer, and the notification costs.
Without it — Tax preparers are targeted for their data, and the IRS requires a written information security plan of every preparer with a PTIN.
General liability
Injury or damage at the office during the season's foot traffic.
Without it — A lease requires it and a client in a waiting room can fall.
Regulatory defense
Counsel for an IRS preparer penalty inquiry or a state board matter.
Without it — A preparer penalty investigation is about you, not the client, and it comes without a claim.
What the regulators actually wrote down.
Under the FTC Safeguards Rule, an accountant or other tax preparation service that is in the business of completing income tax returns is a financial institution, because tax preparation is a listed financial activity.
FTC Standards for Safeguarding Customer Information, 16 CFR § 314.2 (definition of financial institution, example) · checked 2026-10-04
A financial institution under the rule must develop, implement and maintain a comprehensive information security program that is written, and must implement multi-factor authentication for anyone accessing an information system unless its qualified individual approves an equivalent control in writing.
16 CFR § 314.3(a) and § 314.4(c)(5) · checked 2026-10-04
A California tax preparer’s bond must be in the principal sum of $5,000, and the surety’s aggregate liability for any one preparer may not exceed $5,000 however many claims are made.
California Business and Professions Code § 22250.1 · checked 2026-10-04
The claims we actually see.
Ordered by how often we see them, not by how dramatic they are. Each one names the coverage that answers it — and the policy people wrongly assume already does.
Most common
A return is filed late or an extension is missed
Covered by Professional liability
Small, frequent, and the reason a preparer buys the policy after the first one they paid themselves.
Common
An error on the return triggers penalties and interest
Covered by Professional liability
The client owes the tax either way; the policy pays the penalties and interest the error caused, and the defense.
Common
Client data stolen or a refund redirected by fraud
Covered by Cyber and privacy
A single compromised email account exposes every client. Multi-factor authentication is a condition of most cyber quotes.
Less common, severe
Advice on an entity choice or a deduction turns out to be wrong
Covered by Professional liability
Advice beyond preparation is rated as consulting on some forms; say what you do.
What the policy will not cover.
Pick a procedure to see what the exclusion actually means and whether it can be placed somewhere else.
The policy is written for preparation and the advice that goes with it. Services beyond that need to be on the application.
What a tax preparer policy will not cover without being told
Bookkeeping and payroll
Often included, sometimes not; a missed payroll deposit is a different claim from a tax return.
Can it be placed? Yes, by adding the services to the application.
Investment or insurance sales
A preparer who also sells financial products needs the endorsement or a separate policy.
Can it be placed? Yes, with the licenses disclosed.
Attest work
Audits, reviews and compilations are accountant work rated on a different policy.
Can it be placed? Yes, on an accountants professional liability policy.
Refund anticipation products
Bank products and refund advances carry a consumer-protection exposure some carriers exclude.
Can it be placed? Yes, disclosed.
What the insurance company will ask about your tax preparer business
We read the applications the markets use for businesses in this field and pulled out what they actually ask. Have these answers ready and a quote takes a day instead of a week, because nobody has to come back to you for the missing piece.
About the business
- What are your total gross revenues from last year's tax return, excluding recovered expenses?
- What do you estimate your gross revenues will be for this current fiscal year?
- What percentage of your income comes from each type of service: audit, bookkeeping, tax preparation, valuation, or other?
- Do you have any subsidiary, predecessor, or acquired firms for which you need coverage?
How you operate
- Do you use engagement letters with all clients, and do you update them every year?
- Do your engagement letters include alternative dispute resolution or mediation clauses?
- Do you have written procedures for screening clients and disengaging from clients?
- Do you use nonengagement letters to advise potential clients when you won't be providing services?
- Do you maintain a system for identifying and avoiding conflicts of interest?
Safety and controls
- Does anyone in your firm have discretionary authority to manage, pay bills, or invest clients' funds?
- Do you have an employee dishonesty insurance policy or bond that covers theft of client funds?
- Do you maintain a firm practice management system to ensure timely completion of reports and filings?
- Are all your financial statements and balance sheets signed by your owners, officers, or partners?
- Are all work papers indexed to show what was done, when, and by whom?
Your history
- Have you had any professional liability claims in the past?
- In the past year, have you performed services for any clients that later declared bankruptcy or failed as a business?
- Within the past year, have you sued any clients to collect fees?
- Do you know of any act, error, omission, fee dispute, client bankruptcy, or other circumstance that could be the basis for a claim?
- In the past five years, have any of your professional staff had a license suspended or revoked?
Money and people
- What deductible amount do you want per claim and in aggregate?
- What limits of liability do you want per claim and in aggregate?
- Do you want a separate limit for defense expenses?
- Do you have a second person review your attest work, tax work, or all work?
- Are all your professionally qualified staff or billable staff listed with hire dates, designations, hours, and licenses?
Have these ready
- Your last year's federal tax return
- Copies of your current engagement letters
- Your current professional liability insurance declarations page if you have existing coverage
- Resumes of any recently hired lateral hires
- Details of any claims, lawsuits, or incidents from the past five years
You answer what you can; a licensed agent fills the rest with you.
What our tax preparer clients ask us.
How much does tax preparer insurance cost?
Tax preparation is one of the lower-rated accounting services. The price rises with revenue, the number of returns and preparers, any advice or representation beyond preparation, claims history, and the limit you choose. We do not yet have enough of our own quotes for solo preparers to state a range, so we will not guess one. One recent quote from our own files, as an example rather than a range: in August 2026 an established five-person accounting and tax firm with about $1.3 million in revenue, three CPAs and no claims was quoted $4,133 a year for $5M per claim and $5M aggregate with a $2,500 deductible. That works out to about 0.3% of revenue at a high limit.
Do California tax preparers need a bond?
Yes. A preparer registered with the California Tax Education Council must maintain a $5,000 tax preparer bond, and the surety’s total liability is capped at $5,000 for any one preparer. The bond protects clients against your misconduct; it is not insurance for you, and it pays nothing toward your defense. Professional liability is the policy that protects the preparer.
What is tail coverage, and do I need it when I retire or close?
Professional liability is written claims-made, so it answers only claims made while a policy is in force, for work done after the retroactive date printed on it. Stop buying it and a claim about work you already did has nowhere to go. Tail coverage, an extended reporting period, keeps the right to report those claims open for a set number of years after the last policy ends. It is bought once, usually priced as a multiple of the last annual premium, and the decision is easiest to make before you cancel.
Does an enrolled agent need E&O insurance?
The IRS does not require it, and most enrolled agents carry it anyway because the penalties they are blamed for are real and the policy is cheap. Some franchise agreements and software vendors require proof of it.
What does a tax preparer insurance application ask for?
The applications we work from ask the number of returns prepared a year and the split between individual and business, the number of preparers and their credentials, the other services offered (bookkeeping, payroll, advice, financial products), annual revenue, whether you have a written information security plan and multi-factor authentication, your engagement letter practice, and five years of claims or penalty notices. Ten minutes.
Why does the IRS require a security plan, and does insurance cover a breach?
The FTC Safeguards Rule names a tax preparation service completing income tax returns as a financial institution, and requires it to keep a written information security program and use multi-factor authentication on systems holding client data. Cyber insurance covers the breach when it happens anyway; it does not replace the plan, and most cyber carriers ask whether you have one.
Commercial insurance is 96% of what we do — it is not a department here, it is the whole business. Not ready to talk? The guides answer the questions this page raises in more depth. Already insured with us and need a certificate or a policy change? Ask the service team rather than starting a quote — it is faster and it goes to the people whose job it is. We also write home and auto, which is usually cheaper alongside the business policy than apart from it.
Handed a lease, a vendor packet or a client contract with insurance requirements? Paste it into the COI Requirements Decoder to see what each one means for your business, or read what the requirements mean.