Hawaii Tax Preparer Insurance Policy Information
Hawaii Tax Preparer Insurance. A tax preparer is a person who prepares tax returns for small businesses and other individuals. They are used to make the job of filing taxes a lot easier for people who don't know how or don't have the time to do it. With the United States federal tax code growing at the rate it has been over the last couple of year this job of preparing tax returns has become more tedious.
Tax consultants are usually accounting operations that specialize in the review, audit, and preparation of tax statements and returns for their clients. The consultant may offer advice to clients to assist them in legally lowering their tax liability, such as researching allowable deductions. Services are provided to either the general public, a specific firm, or group of client firms. The tax consulting firm may or may not carry the Certified Public Accountant (CPA) certification. The need for the CPA certification depends on the type of work the accountant will be providing and the purpose or type of financial statements to be prepared for the client.
If a CPA certification is required, the accountant must have knowledge and experience in working with generally accepted accounting principles (GAAP) or statutory accounting principles (SAP), depending on the client. Due to the varied areas of knowledge or expertise needed by a tax consultant, the background, education, certification, experience, and professionalism are items to consider.
An accountant has to ensure that they get the taxes filed on time and help businesses to avoid being audited by the IRS. There are also lots of risks involved with the preparation of tasks and one simple slip up, and a tax preparer can find themselves in deep problems like being sued. Thats is why the smartest move a tax preparer can make is to ensure they are properly protected with an-adequate Hawaii tax preparer insurance insurance policy.
Hawaii tax preparer insurance protects your practice from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Understanding The Basics Of Hawaii Tax Preparer Insurance
Protect your tax preparation business from unexpected events and accidents with business insurance policy, so that you can juggle with your business and have less to worry about. A number of insurance companies have developed special insurance programs aimed at addressing the insurance needs of tax preparers. Typically, the programs offer broad liability policy at low rates. They are available to smaller companies (with less than $5,000,000 in receipts). Bigger contracting companies are offered coverage under different terms.
The Risks Involved With HI Tax Preparation
A person who is a tax preparer often works for themselves or a small firm. Whether with a small company or working for themselves there are many risks involved. To ensure that risk of running this type of business is minimal one must be adequately insured. Being covered with Hawaii tax preparer insurance is the best thing that one can do for themselves and their business.
What Types Of Tax Preparation Insurance Are Available?
When deciding on the kind of insurance you should get for your business, it's always a good idea to spend some time talking with an insurance professional. Doing this allows you to find the right coverage for you. If you're a small business and need comprehensive and affordable coverage, then a Business Owner's Policy might be the right thing for you. There are three types of coverage you get with this type of insurance:
- Property Coverage - if anything happens to the equipment or the building you're working in this kind of insurance will keep you covered.
- Liability Coverage - this coverage includes any injury to a third party due to anything you've done.
- Business interruption coverage - if a person has to close down their business because of a natural disaster or business damage this type of coverage helps to compensate for lost of income.
There are also other types of coverages that will contribute to protecting your office equipment like computers and such. Ensure that when you speak with an insurance professional that you ask them about this.
How To Ensure Your Office Equipment Is Covered If You Work From Home
As a HI tax preparer and small business owner, you may be working from your home. Now because of this fact you have to ensure that you are adequately covered when you are doing so. You may have a homeowners insurance policy, but you have to know the limits of that policy. A standard homeowner insurance policy will cover only up to certain limits with a typical $500-$1000 deductible.
Luckily there are a few strategies to ensure that you have the right coverage while you run your business from home:
- In-home business and office insurance. If you run your business from your home, then some insurance companies offer a unique insurance policy that will help you to stay covered. The basic in-home business policy provides up to $10,000 of business coverage. It also provides a liability coverage limit between $300,000 and $1 million.
- Business owners policy: This type of policy as said before is the type of insurance that fits perfectly with people that are running their business from home.
When it comes to keeping your small business protected as a small home business owner, one must ensure that they have the best insurance policy to keep them protected. Think about your business and what you want to achieve and when you've done that speak to an insurance agent and work to find the Hawaii tax preparer insurance policy that it right for you.
HI Tax Consultant's Risks & Exposures
Premises liability exposure is often minimal since most client contact is done electronically or by mail. If clients visit the premises during the busy tax season, they must be confined to designated areas so that they cannot view or overhear conversations regarding other clients' confidential information.
To prevent slips, trips, or falls, all customer areas must be well lighted and free from obstacles. Floor covering must be in good condition. The number of exits must be sufficient, and be well marked, with backup lighting in case of power failure. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If employees work off site, there must be a procedure manual to describe expectations in dealing with clients.
Professional liability exposure can be extensive due to the potential for fines should taxes be prepared incorrectly. Working with individual clients presents fewer professional exposures than working with corporate tax clients. The exposure increases if the firm fails to conduct thorough background checks to verify employees' credentials and education, if training is not conducted to keep up with tax code changes, if clerical workers are allowed to do tasks that only professionals should handle, or if error checking procedures are ignored or are inadequate.
Clients should be informed of credentials of workers prior to consulting. Very serious losses may result from failure to document decisions and actions or to secure client approval.
Workers compensation exposure is generally limited to that of an office. Since work is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations. There is also a high stress factor during tax season as employees must work under deadlines.
Companies should be responsive to employees' needs and encourage vacation time and lunch breaks. Some tax consultants have significant off-site work. Workers can be injured by slips and falls at clients' premises or in automobile accidents.
Property exposure is generally limited to that of an office, although there may be some incidental storage or an area for meetings. Ignition sources include electrical wiring, heating and air conditioning systems wear, and overheating of equipment. Computers and other electronic equipment may be targets for theft.
Crime exposure comes from employee dishonesty, which can be quite serious as tax consultants and their staff possess unique access to customers' personal financial information such as bank records. Potential for theft, directly or by means of identity theft, is great. Hazards increase without proper background checks, along with monitoring procedures and securing of all records to prevent unauthorized access.
All job duties, such as ordering, billing and disbursing should be separate and reconciled on a regular basis. Receipts should be issued for any cash payments received. Bank deposits should be made on a timely basis to limit the buildup of cash on premises. Audits should be performed at least annually.
Inland marine exposure is for accounts receivable if the consultant offers credit, computers, and valuable papers and records for customers' information, which may be originals that are difficult to recreate. Power failure and power surges are potentially severe hazards. A morale hazard may be indicated if the insured does not keep valuable papers and disks in fireproof file cabinets to protect them from smoke, water and fire. Duplicates should be kept off site to allow for re-creation in the event of a loss.
Business auto exposure is usually limited to hired and non-owned (HNOA). If vehicles are provided to employees, there should be written procedures regarding personal use by employees and their family members. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and records kept in a central location.
Hawaii Economic Data, Regulations And Limits On Commercial Insurance
Location is one of the most vital factors that prospective business owners need to take into consideration when they are thinking about establishing an operation. You can have the best possible products and offer the most exceptional services, but if the location doesn't offer a market that can benefit from those goods and services, your business will have difficulty thriving.
As such, if you are an entrepreneur who has set your sights on Hawaii for the headquarters of your business or a new division of an already existing corporation, it's a good idea to familiarize yourself with the state's economic data. It's also important to understand what type of commercial insurance you will need to invest in to protect yourself, your employees, your vendors, and the clients you serve.
Below, we provide a brief overview of important economic data and the commercial insurance requirements for business owners in the Aloha State.
Economic Trends For Business Owners In Hawaii
A state's unemployment rate is a good indicator of the overall economy of the region. It indicates that there are enough jobs available to support the economy, which is a direct reflection of the success of businesses in the state. As of 2019, the Bureau of Labor Statistics indicated that the unemployment rate in Hawaii was 2.6%, 0.8% lower than the national average of 3.4% from the same timeframe. This rate has also decreased throughout 2019, as it was 2.8% in July of 2019.
As with most states, the best locations to start a business in the state of Hawaii include urban areas and the suburban regions that surround them. The top cities for business owners in HI include:
- Pearl City
While several industries do well in Hawaii, certain sectors thrive. Tourism has long been the leading industry in the state, as people from around the globe flock to Hawaii each year.
Agriculture is also a booming industry here; the state is the second largest producer of sugar can in the U.S. Defense is also a key sector here, as all branches off the armed forces have bases located in the state. Another industry that also thrives here is manufacturing; specifically the manufacturing of cotton-based goods, such as clothing.
Commercial Insurance Requirements In Hawaii
The Hawaii Department of Commerce and Consumer Affairs regulates insurance in HI. Hawaii mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Hawaii requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Hawaii also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
Additional Resources For Professional Services Insurance
Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.
- Answering Service
- Attorney Lawyer
- Business Consulting
- Corporate Wellness
- Court Reporter
- Debt Collection Agency
- Detective Agency
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Services
- Financial Planner
- HR Consultant
- Insurance Agents & Brokers Insurance
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Project Management
- Temporary Staffing
- Tax Preparer
Let's face reality. People today are claims conscious, resulting in a significant share of malpractice lawsuits against professionals.
Liability resulting from the rendering of or the failure to render professional services is excluded in most liability coverage forms. This means that a policy covering a account's or lawyers' office will cover liability arising out of the maintenance or use of the premises, but specifically exclude liability arising out of the rendering of a professional service or the omission of such a service.
In addition to the professions in which actual physical or mental injury may be caused to clients, certain other professions are exposed to claims for malpractice.
Claims may be brought against lawyers, accountants, architects, and similar professional persons for errors or omissions in their professional capacity. Errors & Omissions insurance pays damages that might be awarded to a plaintiff alleging professional negligence.
Professional liability policies are made available to such risks, and these policies provide essentially the same protection as is afforded under the physicians, surgeons or dentists professional liability policy.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.
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Also learn about Hawaii small business insurance requirements for general liability, business property, commercial auto & workers compensation including HI business insurance costs. Call us (808) 300-0578.