Tax Preparers’ Cyber Liability Insurance Program

NEW Affordable Cyber Liability Insurance for Tax Professionals Available to PTIN Registrants

BONUS: Policy Includes Proactive Breach Education and Swift Remediation for You and Your Clients

Lloyd's of London

What Every Tax Professional Needs – This Policy Protects You from:

Third Party Data Breach • Hacker & Virus Attacks • Tax Fraud from Stolen Client Data • Forensic Costs • Regulatory Fines • Loss of Client Funds • Notification Costs • Business Interruption • Data Restoration

The Tax Preparers’ Cyber Liability Insurance Program is made possible through the endorsement of PTIN.ORG – The National Directory of Registered Tax Return Preparers & Professionals, Maximus Insurance Agency and Lloyd’s of London. This program is offered to any PTIN member that meets the criteria required through the application process and is eligible for a premium discount.

The cyber liability policy insures the tax preparer, partners and their employees against unintentional data breach which is an incident resulting in the unauthorized disclosure or potential exposure of sensitive or protected data. Lost data may involve private information such as Social Security number, bank account details and credit card numbers, and other personal information.

Rates for a single tax practitioner start at about $300/year. Rates vary on a state by state basis and are determined by the number of owners and employees in the firm. The policy is offered by Lloyd’s of London.

To find out how much your policy will cost, please find your name and submit.

Tax preparers must implement security and privacy practices that are appropriate for the size, complexity, nature and scope of their business activities. The IRS Publication 4557, Safeguarding Taxpayer Data – A Guide for Your Business, contains information to help non-governmental businesses, organizations and individuals to understand and meet their responsibility to safeguard taxpayer information.

Examples of What This Data Breach-Cyber Insurance Policy Covers

Tax Fraud Coverage

Example: Client data is stolen from a tax preparer’s network allowing a hacker access to their tax return files and details. The cyber criminal files the tax returns of their victims and receives their refunds.

Insurance coverage includes:

  • Forensic costs
  • Credit monitoring
  • Regulatory fines & penalties
  • Loss of client funds through fraudulent tax returns
  • Notification costs

Business Interruption

Example: An employee at a medium-sized tax preparation firm clicks on an email link which installs a virus in their computer and shuts down the company system. They don’t have their information backed up, and the computer virus has meant they cannot use their computers. They now can’t file any tax returns for a number of days, and there is media coverage of their interruption. There is no evidence of stolen information.

Insurance coverage includes:

  • Loss of business income
  • Reputational damage
  • Forensic costs
  • Data restoration costs

Third Party Breach

Example: A tax preparation firm outsources all their IT to a third party vendor. The third party vendor has a breach which enables the hacker access to all their clients folders which in the case of this tax preparation firm contains personal records of all their individual clients as well as confidential financial information of their clients’ accounts.

Insurance coverage includes:

  • Defense & settlement costs
  • Forensic investigation costs
  • Notification costs
  • ID/Card monitoring services
  • Call center costs
  • PR expert fees to minimize reputational harm

Loss of Device

Example: A freelance tax preparer loses an unencrypted memory stick containing a list of some 5,000 clients accrued over the last 10 years including home and email addresses, social security numbers and phone numbers.

Insurance coverage includes:

  • Defense & settlement costs for claims of stolen identity
  • HR manager fees
  • Notification costs
  • ID theft monitoring

Disclaimer: This website contains a brief summary of coverage and policy provisions and not intended to constitute a binding contract. All statements herein are subject to the provisions, exclusions and conditions of the policy which shall govern coverage provided. Our policy is designed exclusively for tax preparers engaged in tax preparation work and bookkeeping services.