Private assets · locum cover · terms of business
Professional indemnity insurance (BAV) for an accountancy practice without employees
In a sole trader business everything runs through you: the deadlines, the passwords and the liability. If you are out of action, your clients' obligations simply carry on.
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Deze pagina in het Nederlands: Beroepsaansprakelijkheidsverzekering voor een administratiekantoor zonder personeel.
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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
As a sole trader or self-employed professional you sign for the engagement personally. With no legal entity in between, that means a claim exceeding your insurance lands on your private assets . For you the sum insured is therefore not an abstract figure but the line between a business incident and a personal problem. Choose that sum by the size of your largest client, not by the average.
The loss you cause is pure financial loss: financial detriment without injury or damaged property. In this profession it means VAT processed incorrectly, a supplementary return overlooked, an investment posted wrongly so that a scheme is missed, or a return left undone while you were on holiday. That last one is the characteristic risk of a one-person practice: there is nobody to take over. So agree cover arrangements with a colleague in advance and record which deadlines are then dealt with first.
Do not count on your terms of business as a substitute for cover. Your client can annul a limitation clause if he did not receive the terms at the latest when the engagement was entered into; that follows from Articles 6:233 and 6:234 of the Dutch Civil Code. A limitation is also left out of account in cases of intent or wilful recklessness, precisely the cases that Article 7:952 of the Dutch Civil Code also excludes from cover.
This page deals with one situation. The full overview is on Compare professional indemnity insurance (BAV).
What to look out for
Four points that apply specifically when you run the practice on your own.
Without a private limited company your private assets are at stake
With a sole trader or a general partnership there is no separation between business and private assets. A claim above the sum insured is recovered by the client from your own possessions. So weigh the level of the sum against the largest file you have in hand, and not against what is usual for colleagues with smaller clients.
Cover when you are out of action
Filing deadlines do not wait for your recovery. Agree with a colleague who gets access to your systems in the event of illness or an accident, and which clients are served first. Record that arrangement in writing, including confidentiality. A deadline missed during your absence simply remains your professional error.
Terms in order and demonstrably provided
Send your terms of business with the engagement letter and keep proof of despatch. A reference that only appears on the invoice comes too late. Also state which work you do not carry out, because that demarcation prevents a client from arguing afterwards that you should have been keeping an eye on his tax position.
What the policy does not cover
Outside the cover are fines and penalty payments, repaying your fee and putting your own work right, liability you carry only under a contract or a guarantee, and work for which a licence is missing, such as advice on a financing product under the Wet op het financieel toezicht (the Dutch Financial Supervision Act).
What does your premium depend on?
- Annual turnover — the usual basis for a one-person practice
- Composition of the work — bookkeeping, tax returns or tax advice as well
- Largest client — determines the size of a possible correction
- Sum insured — per claim and capped per insurance year
- Retroactive date — how far back your earlier financial years are insured
- Excess — per claim; a higher amount reduces the premium
Insurers weigh these details differently. That is why comparing pays off.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| You overlook a supplementary return and the client receives a correction years later | No | Yes |
| A client misses a scheme because you posted an investment in the wrong financial year | No | Yes |
| A client blames you for quarterly figures that were too rosy and on which he invested | No | Yes |
| A complaint concerns a financial year from before the start date of your policy | No | Provided that |
| You knock over a cup of coffee onto the laptop of a client sitting at your table | Yes | No |
| You hit a client's garden gate with your company car | No | No |
The retroactive date determines how far back your earlier financial years run; anything above the sum insured you carry privately if you have no private limited company.
Frequently asked questions
The questions we are asked most often about this.
I have no staff and work for small businesses. Do I still need a BAV?
The size of your clients says little about the size of a mistake. VAT processed incorrectly over several years or a missed scheme can produce an amount you would have to work years to earn. With no legal entity, you carry that privately. On top of that, clients and bookkeeping platforms increasingly ask for evidence of insurance before they take you on.
What happens to my liability if I stop?
It does not end with your registration. Complaints about old financial years still come in for years, while a claims made policy only covers what is notified during the term. So take out a run-off period before you give notice or transfer your clients. With virtually every insurer, buying it afterwards is no longer possible.
My client supplied the receipts too late. Am I still liable?
Not if you can show that you asked for the documents, sent reminders and pointed out the consequences. Where the client is at fault as well, Article 6:101 of the Dutch Civil Code apportions the loss. So record delivery dates and reminders in your system; in a dispute that record matters more than the substantive discussion about the return.
Is damage to my own laptop or accounting software covered?
No. This policy pays for your client's loss caused by your professional error, not for your own business assets. For equipment and fittings there is business contents insurance; for ransomware, data breaches and restoring files there is cyber insurance. Your loss of turnover during the downtime is another cover again.
Read more
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