1. Why should you enroll in the Avantax Errors & Omissions (E&O) and Cyber Insurance Program?
An important part of running a successful business is ensuring that you are protected from the unexpected. The Avantax E&O and Cyber Insurance Program is underwritten by National Fire & Marine Insurance Company (a Berkshire Hathaway company), which is a premier insurance carrier for Financial Professional insurance programs, and offers comprehensive group coverage at a very competitive cost.
2. Who is required to enroll?
All Financial Professionals who are affiliated with Avantax and all Financial Professionals who are participants of an Avantax referral program.
3. Who is covered?
Financial Professionals and Referral Representatives who are affiliated with Avantax and who have enrolled in the E&O and Cyber Program (electing, at a minimum, the Basic Coverage level, which includes Securities, Insurance and Cyber) and paid the participation fee are covered under the policies. Your corporation, partnership or other business entity which is owned or controlled by you would also be covered, but only for the professional services rendered by you.
4. Are my secreterial or administrative employees also covered?
Yes, they are covered under the Program for administrative and secretarial professional services they render on your behalf, as long as they are not receiving commission income. If you elect the Basic Plus coverage level, which includes Accounting coverage, your secretarial or administrative employees are also covered for accounting services done on your behalf and pursuant to your direction and supervision.
The following activities performed by an administrative or secretarial employee on behalf of an Insured Financial Professional are contemplated for coverage if the Basic Plus coverage level has been elected by the Insured Financial Professional:
· Preparing, but not signing, tax returns
· Performing bookkeeping or payroll services
· Performing other ministerial services in support of the Insured Financial Professional’s
business
Activities rendered by employees working on the Insured Financial Professional’s behalf that are not contemplated for coverage, regardless of whether the Insured Financial Professional has elected Basic Plus coverage are:
· Providing investment or tax advice
· Signing tax returns
· Appearing before the IRS as an Enrolled Agent on behalf of a client.
NOTE: this coverage does NOT extend to your tax practice partners or other tax professionals in your office, or any secretarial or administrative employees working on their behalf, unless they are also affiliated with Avantax and enrolled in the Avantax E&O program under the Basic Plus coverage level.
5. What Professional Services are covered under the Program?
Full-time Financial Professionals are covered for the recommendation, sale, or servicing of approved securities products and services, approved investment advisory products, and insurance products and services approved by and provided through Avantax and its affiliates. (You must list your insurance products on your Outside Business Activity disclosure reporting form.)
Referral Representatives are covered for the referral of securities products to a full-time Avantax Financial Professional.
6. Are Accounting and Tax Services covered?
Yes, provided the full-time Financial Professional elects and pays for the optional Accounting Coverage extension by purchasing the Basic Plus coverage level during annual enrollment. If elected, Professional Services shall also include: bookkeeping; issuance of compilation reports; reviews of unaudited financial statements; management, advisory or consulting services with respect to improving business efficiency; providing tax advice; preparing tax returns and acting as an enrolled agent or CPA representing clients before the IRS and preparing the beneficial ownership report pursuant to the Corporate Transparency Act. Limited coverage for Audit Services rendered to individual customers is included under the Accounting Coverage extension (audit services for firms/entities remains excluded, refer to the Highlights Guide for details).
NOTE: (1) Coverage for accounting and tax services is limited to you, your business entity, and your administrative, secretarial, bookkeeping and tax preparation employees strictly for the accounting and tax services done by you or on your behalf, as described in FAQs above. Tax work done by or on the behalf of any other tax professionals in your office is outside the scope of this coverage and should be separately insured. (2) Referral Representatives who require the Accounting Coverage extension must enroll at the full-time, non-discounted E&O participation cost for such coverage.
7. Does the E&O Program provide Cyber Liability coverage?
Cyber Liability insurance coverage is provided under a separate policy that covers the Financial Professionals of Avantax. Please see the Cyber liability insurance highlights on the Avantax enrollment website.
8. What are my limits of liability?
There are three limits available to Financial Professionals,
$1,000,000 per Claim/$1,000,000Aggregate,
$2,000,000 per Claim/$2,000,000 Aggregate, and
$5,000,000 per Claim/$5,000,000 Aggregate.
Please note, certain coverage extensions include sub limits of liability that are included within and not in addition to the limits of liability elected by the enrolled Financial Professional, see coverage question 2 of the Highlight Guide for more details. There is no Total Policy Aggregate applicable to all Insured Financial Professionals.
9. What is the retention under the program?
There is a $5,000 retention per claim for all claims except:
· $2,500 per Claim for accounting and tax services (other than audit services).
· $5,000 per Claim for audit services rendered to an individual customer (audit services rendered to firms/entities excluded from coverage).
· $10,000 per Claim for Trade Errors.
· $10,000 per Claim involving Fraudulently Induced Client Funds Transfers
10. Does the policy cover Prior Acts Coverage?
a. Financial Professionals Errors & Omissions Liability
Yes, your Prior Acts Date is the earlier of your date of affiliation with Avantax, HD Vest, 1stGlobal or the date you first obtained—and continuously maintained— a “claims made” professional liability policy. For Financial Professionals that contract with Avantax after 12/31/24, a sub-limit in the amount of $1,000,000 Each Claim/$1,000,000 Aggregate per Insured Financial Professional will apply to prior acts claims.
b. Accountants Professional Liability
Yes, your Prior Acts Date is the date you first obtained—and continuously maintained— a “claims made” Accounting professional liability policy.
11. What happens if my affiliation with Avantax terminates during the policy period?
If your affiliation with Avantax terminates during the policy period, coverage automatically ceases on the date of termination. The Participation Fee under the E&O Program is considered fully earned, and, in the event your affiliation with Avantax is terminated during the policy period for any reason, there will be no return of your Participation Fee. However, depending on the reason for your termination, an automatic Extended Reporting Period (ERP) may be available to you at no cost. An ERP allows you to report new claims that are first made and reported during the ERP arising out of an actual or alleged covered negligent act committed on or after your affiliation date with Avantax and on or prior to your termination date.
Please be advised that if your affiliation with Avantax is terminated for:
a. General Reasons: an automatic one (1) year ERP shall be provided to you at no cost;
b. Retirement, Disability or Death: an automatic unlimited ERP shall be provided at no cost; or
c. Disciplinary Reasons: an automatic ninety (90) day ERP shall be provided to you at no cost.
Please Note: FPs planning to retire must terminate their registration with Avantax by December 31, 2025 to be eligible for the ERP. FPs retiring after December 31, 2025 must enroll for 2025-2026 E&O coverage in order to qualify for the ERP benefits referenced above. Enrollment fees will not be prorated for terminations occurring after the new coverage year has begun. If you have any other Professional Liability policy, any applicable ERP referenced above shall not apply.
12. What happens if I sell, or otherwise discontinue my accouting practice but continue my insurance, securities, and investment practice?
Berkshire Hathaway will continue to provide prior acts coverage for claims arising out of Accounting Services alleged to have occurred on or after your Accounting Prior Acts Date (see FAQ #10.b.) and on or prior to the date you sold your accounting practice, provided you’re main actively contracted with Avantax and enrolled in the Avantax E&O program at the Basic level to cover your insurance, securities and investment practice. If you later decide to resume Accounting Services and wish to obtain coverage for Accounting Services through the Avantax E&O program, you must re-elect the Basic Plus coverage level, which includes Basic level coverage for your insurance, securities and investment practices, plus coverage for Accounting Services.
Please note, if you terminate your contract with Avantax and at the time of your termination you have not elected the Basic Plus coverage level, any automatic ERP you may be provided under the terms of the policy will not include the Accounting extension.
13. What if I don't enroll, will I be automatically enrolled?
Financial professionals who do not enroll by January 23, 2026 will be automatically enrolled as follows:
If you were enrolled from December 31, 2024 – December 31, 2025 you will be automatically re-enrolled at the same coverage level elected during the that same policy period. Financial Professionals who did not participate in the program from December 31, 2024 – December 31, 2025 are required to enroll for the first time effective December 31, 2025 and will be enrolled at the basic coverage and limit (securities, insurance and cyber coverage at the $2,000,000 limit) if they have not already enrolled before December 31, 2025. The full annual E&O Participation Fee will be automatically debited from your commissions in late January. You are encouraged to enroll yourself in the program as soon as possible to ensure that you receive the level of coverage that you would prefer and that you receive a certificate of insurance timely. FPs who are required to participate but do not enroll on their own before the January 23, 2026 enrollment deadline will receive their certificate via email on or after February 25, 2026.