SWG PL Protects Accountants, Bookkeepers, and Tax Professionals During Tax Season and Beyond

Feb 2022

Tax season is fast approaching. As accountants, bookkeepers, and tax professionals prepare for the busy season, now is a good time to ensure that they have adequate insurance coverage.

How Are Accountants, Bookkeepers, and Tax Professionals Different?


Accountants are certified professionals who perform various functions such as account analysis, auditing, and financial statement analysis. Accountants may work for accounting firms or large companies’ internal finance departments, or they may set up their own practices.

Accountants’ responsibilities often depend on their educational background and designation. In this field, most professionals hold a bachelor’s degree and, if employed by a corporation, may need certification to advance. Certification requirements vary by role, with some requiring additional education beyond the bachelor’s degree and successful completion of rigorous exams.

Most accountants hold one or more of the following designations: Certified Internal Auditor (CIA), Certified Management Accountant (CMA), and Certified Public Accountant (CPA). Although CMAs do not need a license to practice, many choose to become CPAs because the designation is considered the gold standard in accounting.

Liability Exposures for CPAs and Accountants:

Accountants must adhere to the ethical standards and guiding principles of the region in which they practice. CPAs are legally and ethically responsible to be honest, trustworthy, and to avoid negligence in their duties. Because CPAs have real influence over their clients, their judgment and work can influence not just an individual, but an entire company, including its employees, its board, and its investors. Accountants may be held responsible for uninsured losses suffered by creditors and investors due to misstatement, negligence, or fraud.

Generally, accountants can be held liable under either common law or statutory law. Liability under common law encompasses negligence, fraud, and breach of contract, while statutory law includes state or federal securities laws.


A bookkeeper’s job is to provide accurate and up-to-date financial information about a business. They are always keeping tabs on the business. In most cases, their reports are used by business owners and managers to make decisions. A few bookkeepers, however, help develop strategies. In addition to preparing annual financial reports and tax returns, bookkeepers may also share some jobs with accountants.

Data entry and bank reconciliation are the two most fundamental tasks of small business bookkeeping. Without them, all other tasks are meaningless. Here are some core duties, common additional duties, and advanced bookkeeping tasks.

  • Data entry:Keeping track of financial transactions and balancing the books.
  • Bank reconciliation:Verifying the accuracy of the books against the bank statements and other sources.
  • Monthly reports:Providing an overview of the business’s finances.
  • Accounts receivable (and credit control):Creating and sending invoices, and following up with payments.
  • Accounts payable:Ensuring that invoices from suppliers are accurate and paid on time.
  • Payroll:Calculating salaries and deductions.

Liability Exposures for Bookkeepers:

Accounting and bookkeeping professionals must adopt the new procedures when creating financial statements. To provide their clients with the proper reports, bookkeepers and business owners will need to train themselves and their employees on the new standards when they are adopted.

A bookkeeper may be asked to create false financial documents or to create accounts that conceal profits by one of their clients. Bookkeepers of record can be prosecuted for making false claims. For example, the client could testify that the bookkeeper made the entries on their own or that they have been stealing from the company to conceal their own involvement in the fraud.

Tax professionals:

Tax professionals, or tax accountants, submit tax forms on behalf of clients to pay the appropriate amount and maximize the returns. Their responsibilities include interviewing clients about their income and expenses, auditing account details, and liaising between clients and the IRS.

Tax service providers generally fall into two categories: the licensed tax professional – a Certified Public Accountant (CPA), or the unlicensed tax professional – a tax preparer.

Unlicensed tax preparers typically help clients who simply need their income and deductions organized on a tax return. Because their scope is limited to simpler tax situations, unlicensed tax preparers charge lower service fees.

Liability Exposures for Tax Preparers:

Non-licensed professionals in this category are generally subject to minimal regulation if any. Consequently, tax preparers don’t need to take Continuing Education Courses (CPEs), which are required of all CPAs. By taking these courses, professionals not only gain professional expertise but also learn about new laws and tax planning strategies. Furthermore, a tax preparer without a license won’t be able to discuss their client’s unique tax situation should they receive notice or examination from the Internal Revenue Service.

About SWG PL: Miscellaneous

SWG PL – Miscellaneous Professional Liability insurance offers a packaged E&O and CGL policy that covers a wide range of classes of business. Tailored E&O coverage protects small to large firms from a broad range of miscellaneous risks. SWG provides a Miscellaneous PL policy at competitive rates, bringing extensive knowledge and underwriting experience in professional liability.

We Cover:


  • Accountants, Bookkeepers, and Tax Preparation
  • Business Consultants
  • Collection Agencies
  • Travel Agents
  • Employment Agencies
  • Event Planners
  • Interior Designers
  • Leasing Agents
  • Management Consultants
  • Translators
  • Utility Locators
  • Paralegal Offices
  • Occupational Health and Safety Consultants
  • And many more

To learn more, visit https://swgins.com/product/miscellaneous.html.

Content is current as of the date of broadcast and is subject to change without notice.