Deadlines · additional assessments · fines excluded
Professional indemnity insurance (BAV) for a tax advice firm
In tax work the missed deadline is the biggest risk. A six-week objection period that expires cannot be repaired and the loss is fixed.
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Deze pagina in het Nederlands: Beroepsaansprakelijkheidsverzekering voor een belastingadviesbureau.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
A tax advisory firm makes mistakes that can be expressed in money and that often only become visible months later. A notice of objection arriving after the six-week period in Article 6:7 of the Dutch General Administrative Law Act (Awb), a request for a fiscal unity that was not filed, a business succession relief with a condition overlooked, a VAT supplementary return left undone or an incorrect application of the reduced rate. What the client claims is pure financial loss: money he has lost through your mistake. Professional indemnity insurance is intended for that. The general explanation is set out on the hub page on the BAV.
Not every assessment is a loss. Tax the client owed in any event is not detriment you caused; he has simply paid later than planned. The loss lies in the difference: the deduction missed, the relief lost, the tax interest and the cost of the objection or appeal proceedings needed to put things right. Insurers assess that difference closely and ask for the correspondence showing which choice the client would have made on correct advice. So record those decision points in writing on the file.
Administrative fines are a separate chapter. A default or offence penalty from the Belastingdienst is a punishment and not compensation. It is excluded on virtually every liability policy, even where your client tries to recover the fine from you. The same applies to sanctions for failing to comply with the Wwft (the Dutch anti-money laundering act), including the duty to report unusual transactions. Liability for the advice that led to the fine can be covered. The fine itself cannot.
This page deals with one situation. The full overview is on Compare professional indemnity insurance (BAV).
What to look out for
Four subjects that make the difference at a tax firm between a covered claim and an uninsured one.
Monitoring deadlines is your biggest exposure
Objection, appeal, filing and application deadlines are hard. A mistake here cannot be argued away as a difference of opinion. Insurers therefore ask how you monitor deadlines and whether a second person reviews the work during the filing season. A demonstrable four-eyes principle on time-sensitive documents helps both with acceptance and in the assessment of a claim.
Who is covered by the policy
Alongside the company, your staff, trainees, hired-in workers and any locum must be insured as well. If you work with third parties you engage, for example a specialist firm for international work, check whether liability for third parties engaged is included or in fact excluded. If it is excluded, you carry the risk of the referral yourself.
Advice that pushes the limits
Structures that you know or ought to suspect will not hold fall under the exclusion for intent and wilful recklessness in Article 7:952 of the Dutch Civil Code. Reportable cross-border arrangements also call for a record of your own assessment. Document that you discussed the risks with the client and that, despite your caveat, he chose the route in question.
The limits of the cover
There is no cover for fines and penalty payments, repayment or correction of your own fee and the remedial work you carry out yourself, and liability you have accepted contractually above what the law requires. If you work with professional terms limiting liability, those apply only if they were handed over before or when the engagement was concluded, as Articles 6:233 and 6:234 of the Dutch Civil Code require.
What does your premium depend on?
- Turnover and number of tax specialists: determines the number of files and therefore the chance of a claim
- Ratio of compliance to advisory work: complex structuring advice weighs more heavily than routine returns
- Client segment: private individuals and small businesses produce a different loss profile from large groups
- International files: cross-border work increases both the complexity and the territorial scope
- Internal controls: recorded deadline monitoring and peer review work in your favour
- Claims history and retroactive date: earlier notifications and how far back the cover runs
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| An exemption is left unused in an inheritance tax return and the assessment becomes final | No | Yes |
| A VAT rate applied incorrectly surfaces in a tax audit, with tax interest over four years | No | Yes |
| After a ransomware attack your files are unreachable for weeks and filing deadlines expire | No | Provided that |
| A client falls over an unmarked step in your office | Yes | No |
| A member of staff hurts his back lifting archive boxes | Provided that | No |
| A leak in the building damages your server cabinet and your scanning equipment | No | No |
Damage to your own property falls under neither policy and belongs on business contents insurance.
Frequently asked questions
This is what people ask us most.
Is a fine from the Belastingdienst for our client insured?
No. Default and offence penalties are a sanction and not compensation, and liability insurers exclude them. If the client recovers the fine from your firm, you pay it yourself. Tax interest and the cost of putting things right can be treated as loss, provided it is established that the client would have made a different choice on correct advice.
Our client supplied incorrect figures. Are we still liable?
In principle you may rely on the client's data, but your duty of care under Article 7:401 of the Dutch Civil Code means you must ask further questions where there are indications that something is wrong. Missing documents or unexplained items call for a written question and a record of the answer. The client's own fault can reduce the compensation under Article 6:101 of the Dutch Civil Code.
We are taking over the portfolio of a fellow firm. What do we arrange?
Claims about advice given before the takeover can land with you as soon as you become the point of contact. Ask for prior-acts cover with a retroactive date that includes the acquired files, and record which obligations do and do not come with them. Also have the transferring firm arrange its own run-off cover, otherwise a gap still appears.
Do we need cover other than the BAV?
Usually yes. For injury and damaged property at the office or at a client you need public and employers' liability insurance. For a data breach or ransomware in your tax files, cyber insurance for accountancy practices is the appropriate policy; liability cover and the cost of restoration after an intrusion are two different things.
Read more
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