Accountant & CPA Insurance

A comprehensive insurance package for accountants usually comprises essential policies such as the Business Owners Policy, Professional Liability, Workers' Compensation, and Cyber Insurance. These are crucial insurance safeguards necessary to protect both your employees and your business.

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Accountant & CPA Insurance

Business Owners Policy Workers Compensation Insurance Professional Liability Insurance Umbrella or Excess Liability Insurance

What is Accountant Insurance?

Certified Public Accountants (CPA), auditors, bookkeepers, and tax preparers play a vital role in managing the finances of businesses and individuals. A tax filing error or incoherent financial records can leave your business prone to lawsuits and financial burdens. Damage to your office building and lost records may also cause you to close your practice. Accounting can be considered a low-risk business considering the property and public liability risks, although the risks of professional liability insurance for CPA may weigh your small business down. Accountants across the country face similar issues while running their business.



A typical CPA insurance program for Accountants include Business Owners or Package Policy, Professional Liability, Workers Compensation and Cyber  policies. These are the basic coverage types recommended  to protect your employees and the business from loss. A BOP or Package policy will include the General Liability and Property coverage for owned buildings and business property and the option to include employee dishonesty and business interruption and extra expense.

Primary Risk Assessment For Accountant Insurance

Accountants and auditors face several risks and challenges while working as individual entities or with a team.

  • Scenario 1 - Your home office burned down by fire. All the important documents are gone, your computer is also a total loss. The clients hold you responsible for the hard copy and electronic documents they had submitted to you and want them recovered. There will be time and money spent recreating those documents. The BOP typically includes coverage for valuable papers and reconstruction expenses.
  • Scenario 2 - Your employee made a mistake in filing tax returns for a multinational company that has been a long-term client. The client sues your accounting firm for professional negligence and substantial financial loss.
  • Scenario 3 - A client visiting your office comes in and slips and falls on a wet floor, breaking his hip and is unable to work or travel for business. He sues your firm for negligence, medical costs, and lost income.
Accountants working

Accountant Insurance Recommended Policies

From number crunching to tax filing and managing customer relationships, owning a successful accounting firm takes expertise, time and hard work. Protect your business with the right insurance. We realize the sheer complexity of financial service company offerings requires specialized insurance. This is why CPA and accounting insurance is essential to help protect your business.

Insurance for the accounting industry is a type of business insurance that safeguards private enterprises from the many issues faced by the financial sector. You could also call this type of insurance by other names, such as:

  • Certified public accountant (CPA) Insurance
  • Accountant Insurance
  • Bookkeepers Insurance
  • Payroll Services
  • Tax Preparers

Covering Your Accounting Firm’s Team

Accounting is likely not one of the industries to come to mind when thinking about workplace injuries. Office jobs are generally seen as very safe. However, inadequate posture and poor ergonomics could lead to repetitive motion injuries that might put your employees on the sidelines. With workers’ compensation insurance for employee injuries, the carrier will pay for the medical care and wage loss your employees need.  Allowing your accounting firm to spend on growing the business.

Covering Your Accounting Firm’s Operations

Accounting service providers often manage personal and private information of their customers. Storing this type of sensitive data opens your business up to becoming a target of cybercrime.  It could be holding your company data ransom or a common data breach where client data is stolen.  Either way, this could hurt your operations, client confidence, and reputation. Therefore, getting the right kind of accounting insurance is crucial.

Covering Your Accounting Firm’s Property

Unexpected damage to building, business personal property, computers systems, and communication equipment can happen anytime. You can protect your business's assets with commercial property insurance for accounting service companies.

Business Owners Policy (BOP)

A Business Owner’s Policy is a holistic, customizable insurance policy that bundles basic insurance needs. BOPs combine business property and business liability insurance into an insurance package.

Business insurance, also known as commercial insurance, helps business owners defend themselves against unexpected financial losses. There are several options when it comes to insurance types for business enterprises. Insurance can help protect your firm from the following:

  • Third-party property damage liability
  • Third-party bodily injury
  • Damage to your building or contents
  • Loss of business income
  • Dishonest employees
  • Loss of money and securities
  • Damage to computers, phones, printers scanners (electronic data processing equipment)

BOP insurance can be customized, and you can choose what you need.  A BOP protects your business assets against severe losses from elements like fire, theft, hurricane, tornado, riot, and other covered perils. Business owners’ policies also help cover general liability claims that could arise from your business operations. These include liability claims of bodily injury, property damage, and personal and advertising injury.

BOPs for accounting firms were created to provide coverage for similar businesses having the same insurance needs. Tailoring your BOP is a substantial first step when insuring your business. Small companies should implement this from the start of the policy to prevent uninsured losses and damages that could have been easily covered time was taken to understand what is available.

Commercial Property Insurance

Commercial property insurance compensates your accounting business for stolen, vandalized, or damaged business property that's located at your business location. It covers your building, equipment, furniture, fixtures and other business assets.

Commercial property insurance shields you from paying to replace tee property needed to run your accounting business. It protects against damage to your office if burglarized, burned, vandalized, and when burst pipe causes water damage.

If you have a commercial lease for your accounting firm, your landlord will likely require you to hold this insurance coverage. If you have a business loan, or equipment lease you will also need to provide evidence of this coverage. Even if this insurance isn't compulsory, it’s a good idea to have. 

Business income and extra expense insurance are also part of the commercial property policy.  This insurance protects your revenue stream and provides help with the expenses needed to set up a temporary location if yours is damaged by a covered peril and is unfit for operations.

Business Interruption & Extra Expense Insurance

Business Interruption and Extra Expense covers the repercussions your accounting business may face as a result of direct physical damage to your premises by a covered peril. Based on the limit purchased and coinsurance percentage or monthly limitation, Business Interruption compensates for lost business income incurred because of the shut down of your business. An example of extra expense would be the additional cost involved with getting a new furniture shipment expedited from an overseas manufacturer or setting up a temporary office space while your building is being repaired or rebuilt.

General Liability Insurance

General liability insurance policy covers the range of risks that a small bookkeeping operation would need, including coverage for third-party injuries and property damage. Increase the value of this policy by getting it with property commercial property insurance to make a package.

General liability insurance protects you from litigation costs and provides credibility in business dealings. It enables you to qualify for leases and commercial contracts.

While accountants, tax preparers, and other professionals in the finance and accounting fields are not considered to be at substantial risk, this does not mean that you will not need to deal with physical incidents. This insurance policy covers liability related to the following:

  • Third-party bodily injury
  • Third-party property damage
  • Personal and Advertising injuries
  • Medical payments

Professional Liability Insurance for CPA

Professional liability insurance, also known as Errors & Omissions, protects accountants, bookkeepers, tax preparers and others in the field of accounting from liability resulting from the performance of the professional services provided. If a mistake is made in a financial filing or tax preparation, it could cause your client to not only lose money but also be fined for the error.  The client would expect you, the professional to indemnify them for their financial loss caused by your firm’s accountants. 

Errors & Omissions insurance does not cover the same type of loss that general liability insurance covers. While general liability covers physical injury or property damage to others, professional liability pay for your customer’s loss of money caused by your professional services.

Workers Compensation Insurance

Workers Compensation and Employers Liability provides coverage for your employees while working, in the accountants office, or out meeting with clients. Workers compensation is a significant, essential and required portion of an Accountant or CPA insurance program. Most states require business owners to have a workers compensation policy (depending on the number of employees). This coverage pays for employees injuries, it pays medical expenses for injuries suffered on the job, a percentage of lost wages (typically 66 2/3%), and death benefits statutorily required in your state. The Employers Liability portion of the policy will pay legal costs to defend your business and pay negotiated settlements or court-awarded judgments if your employee sues your business for negligence contributing to their injury.

Cost of workers compensation for finance and accounting businesses?

The workers compensation price is a specific rate for each $100 in payroll. Your premium depends on the workers compensation classification of your companys various positions, like outside sales or auditors, or strictly in-office clerical employees.

Lower the cost of workers comp with risk management

An employee who only works in an office still has the chance of injury while on the job. Staff in any office can trip over equipment or slip and fall on a wet floor. An on-the-job injury could lead to a claim and an increase in your premium. Business owners can safeguard employees through risk-management techniques and create a safe work environment. This could include eliminating office clutter, which may limit the chances of slipping and falling, or ergonomic workstations to avoid repetitive motion injury. These steps will reduce the chances of workplace injuries and insurance premiums.

Cyber Insurance

This policy is an essential part of CPA, and accounting company insurance as these types of businesses deal with a considerable amount of client personal and financial data while servicing their clients accounting needs. Data breaches, cyber extortion, ransomware attacks, fraudulent bank transfers, client notification, credit monitoring expenses, public relations and crisis management expenses can all be included in a broad form Cyber Insurance policy. Make sure your business has this valuable coverage.

Cyber liability insurance can protect accounting professionals, auditors, and other financial experts in the event of a data breach and client lawsuits resulting. You may be held liable if your clients suffer financial harm like becoming a victim of identity theft after a cyberattack. This policy would cover legal expenses and fees while also paying the court-awarded damages.

This policy provides can provide different coverage for the accountants operations:

  • Data breach liability lawsuits
  • Breach notification expenses
  • Credit monitoring costs
  • Public Relations
  • Damage to your firms’ computers, network or other equipment
  • Ransom
  • Lost income
  • Fraudulent bank transfers
  • Phishing or malware attacks

There are two kinds of cyber insurance:

First-party: First-party cyber liability insurance will pay for expenses incurred as a result of a covered incident, such as authenticating a data breach, forensic accounting, lost income, regulatory fines, and ransom. First-party cyber insurance provides essential coverage for any enterprise that deals with financial transactions, social security numbers, and other personal data.

Third-party: If your clients data is compromised in a breach or cyberattack and blames you for it, you could face litigation. For instance, an accountant may not keep systems updated with the latest security technology which permitted an attack. The affected client might choose to sue the accounting pro to recoup their costs in dealing with the situation. Third-party cyber insurance would cover legal expenses associated with data breaches by compensating for:

  • Court costs
  • Attorney’s fees
  • Settlements or judgments

Valuable Papers Coverage

This coverage helps you reproduce, restore, or replace records if a covered event damages them. It is required for CPA or accountant insurance as these firms possess valuable client data and records. Records can be hard copies or kept electronically. Coverage includes expenses from additional workforce hours or costs incurred to replace lost records.

Printed documents or records other than money or property are typically included in the phrase valuable papers and records. Data processors, data, and media are excluded.

You might rely more frequently on electronic copies of your important documents and paper. Nevertheless, your paper files should always be protected if you experience a terrible catastrophe, such as a fire or tornado. You will also have some existing coverage for valuable papers with a standard business owner's policy. Still, the included limit is relatively low and you might want to increase it to meet your requirements.

This is where it would be helpful to understand precisely how you can restore your valuable records in case of a loss. You can base your final costs on your specific company needs and consider what it would cost to hire specialists to replicate your records:

  • Would you need to hire temporary employees to help replace the papers?
  • How many hours of work would it take to replace the papers?
  • Would you need to obtain original versions?
  • Would you need to recreate original work, like home inspections, surveys, or maps?

If you're familiar with the actual costs, you may realize that you don't need as much coverage as you currently have. Therefore, Valuable Papers Coverage makes an essential aspect of the CPA and Accountant insurance policy.

How Much Does Accounting Insurance Cost?

CPA and Accounting firm insurance for can run anywhere from $1,000 and up depending on revenue, number of licensed staff, services offered, types of insurance purchased, number of employees, payroll and limits required. Your total cost will depend on a combination of these factors.

Some of the factors that insurance firms take into account when writing CPA insurance include:

Services - CPAs typically pay more for professional liability than bookkeepers due to their clientele and services offered. Companies that need financial statements prepared by a CPA are held to higher expectations and strict professional standards in the industry.

The number of employees - The more significant risk of having employees, increases the likelihood of needing workers' comp insurance. The greater the number of employees involved, the greater the cost of general, workers compensation, professional, and cyber liability insurance.

Claims history - Insurance providers generally consider three to five years of loss runs to review when making a decision to insurance a company. The losses are reviewed by the line of coverage. Insurers set higher premiums if they see a frequency or severity in the prior loss occurrences.

Policy terms and conditions - The greater the degree of coverage you want from a policy, the more you will have to pay. The more expensive an insurance coverage is means the need for the coverage is greater and the risk of loss is more likely.

The cost of insurance for an accounting firm will also vary based on the following factors:

  • Annual revenue
  • Type of accounting & auditing services offered
  • Owned vehicles
  • Location of the office
  • Number of employees and annual payroll
  • Value of business equipment and property owned or leased

Who Needs Accountant and CPA Insurance?

All professionals in the financial and accounting industry benefit from these recommended insurance types. Some of the professions that Accountants Insurance is vital for are as follows:

  • Tax preparers
  • CPA firms
  • Accounting firms
  • Accounting private practices
  • Payroll accounting services
  • Payroll preparation services
  • Auditors
  • Circulation auditors
  • Payroll auditors
  • Billing services

Your work requires precision and accuracy. You must adhere to a high degree of accuracy and reliability within your operations. Also, you are a living, breathing human being, meaning mistakes happen. Accountant insurance helps protect you and your business from the loss exposures faced every day.:

Frequently Asked Questions (FAQ) about Accountant Insurance

1. What does Errors & Omissions Insurance (E&O) mean in accounting?

E&O insurance, also known as Professional Liability, for accounting services covers claims relating to the professional services performed (accounting, bookkeeping, tax preparation, audits, etc.) when an error, oversight or negligence causes a financial loss for your client.

2. What is CPA Insurance? Which Insurance should a CPA have?

CPA Insurance is a combination of insurance policies or coverage that protects accountants and CPAs from risks they are exposed to in their daily operations. Third-party property damage or bodily injury liability claims, professional liability claims, loss or damage to owned assets and more. A CPA should have General Liability, Professional Liability, Commercial Property, Cyber, Workers Compensation, and Crime insurance.

3. What are the benefits of Business Insurance for Accountants?

Accountants and Financial Firms Business Insurance benefits include protection from third-party bodily injury or property damage liability claims and lawsuits, reimbursement for damage or repair of owned assets for covered perils, replacement of net revenue when your business location has covered building damage preventing you from operating, protection for collateral of mortgagee, lessor or loss payee, medical care and lost wages for employees injured on the job, reimbursement for employee theft, coverage for cybercrime and overall minimizes the negative financial impact on the business of insurable events.

4. What is the minimum premium for Professional Liability Insurance for CPA?

In the accounting profession, professional liability insurance costs can range from $1,000 to $25,000 and up. There are too many variables that contribute to your premium cost to give a specific dollar amount. Many insurance companies have minimum premiums of $1,000, others $2,500 or more. The total cost will depend on the insurance types purchased, size of the firm, annual revenue, type of financial service offered, client type (personal or business), and payroll, owned assets insured, years in business, loss experience and if there are company owned vehicles. These are examples of the factors used to determine the premium.

5. Is Professional Indemnity insurance for Auditors the same as Professional Liability Insurance?

Yes, professional liability is the same thing as professional indemnity insurance. Also known as error and omissions insurance or malpractice insurance, it is a form of liability insurance that covers what general liability coverage does not. Professional liability pays for claims or lawsuits resulting from an error, omission or negligence in the performance of your professional service that causes a financial loss to your client.

6. What is the difference between building insurance and apartment building insurance?

Building insurance covers physical damage to the building caused by a covered peril. Apartment building insurance includes Building coverage on the Property policy and is one of the necessary policies for apartment owners among many others mentioned above.

7. How to add a landlord to renters' insurance?

Building insurance covers physical damage to the building caused by a covered peril. Apartment building insurance includes Building coverage on the Property policy and is one of the necessary policies for apartment owners among many others mentioned above.

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