Quick Answer: How much does CPA insurance cost?

E&O insurance for accountants starts at $67/mo for solo practitioners. Compare top carriers below.

Coverage	Solo CPA	Small Firm (2-5)	Mid-Size Firm
E&O / Professional Liability	$67–$150/mo	$150–$400/mo	$400–$1,000/mo
Cyber Liability	$50–$100/mo	$100–$250/mo	$250–$600/mo
General Liability (BOP)	$40–$80/mo	$80–$200/mo	$200–$500/mo
Bundle (E&O + Cyber + GL)	$130–$250/mo	$250–$700/mo	$700–$1,800/mo

Top carriers: Hartford (best rates) · Chubb (highest limits) · CNA (accounting focus) · Hiscox (solo CPAs) · Travelers (bundled packages)

Quick Start: Find Your Path

Choose the option that best describes you:

Solo CPA / Tax Preparer

You're an individual practitioner handling tax returns, bookkeeping, or consulting work.

What you need: Professional Liability (E&O) + Cyber Insurance starting at $130-$250/mo

Jump to coverage for solo practitioners →

Small Firm (2-10 people)

You run a small accounting firm with employees or partners.

What you need: Full coverage package (E&O, Cyber, BOP, Workers Comp) starting at $250-$700/mo

Jump to small firm coverage →

Just Need Pricing?

Skip the details and see exactly what insurance costs for your practice size.

Compare rates: See complete pricing breakdowns by firm size and coverage type.

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Why 5,000+ CPAs Trust These Carriers

A+ rated insurance companies specializing in accounting professionals:

Hartford - 200+ years protecting CPAs with specialized E&O coverage
Chubb - Premium carrier with highest limits available ($10M+)
CNA - Exclusive Accountants Professional Liability program
Hiscox - Fast online quotes, excellent for solo practitioners

Real testimonial from protected CPA:

"When a client sued me for a $45,000 tax error, my Hartford E&O policy covered everything—the settlement, legal fees, even expert witnesses. Without insurance, I would have lost my practice." — Sarah M., CPA, Ohio

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Core Coverage Information:

What is Accountant Insurance?
Essential Coverage Types for Accountants

Carriers & Costs:

Top Insurance Carriers for Accountants
How Much Does Accountant Insurance Cost?
How to Reduce Your Insurance Costs

Policy Details:

Common Policy Exclusions to Watch For
Special Considerations by Practice Type
Tail Coverage: What You Need to Know

Claims & Buying:

When Claims Happen: What to Expect
How to Buy Accountant Insurance
Frequently Asked Questions

What is Accountant Insurance?

Accountant insurance refers to a suite of specialized business insurance policies designed to protect accounting professionals, CPAs, bookkeepers, and accounting firms from the specific risks they face in their practice.

Unlike general business insurance, accountant insurance addresses the professional liability exposures unique to financial services, including errors in tax preparation, missed filing deadlines, incorrect financial advice, and data breaches involving sensitive client financial information.

Who Needs Accountant Insurance?

Certified Public Accountants (CPAs) - Individual practitioners and CPA firms
Tax Preparers - Seasonal and year-round tax preparation services
Bookkeepers - Virtual and in-office bookkeeping services
Accounting Firms - Small partnerships to large regional firms
Financial Consultants - Advisory services with accounting components
Forensic Accountants - Litigation support and fraud investigation
Payroll Services - Companies handling client payroll processing

Essential Coverage Types for Accountants

A comprehensive CPA insurance program typically includes four core coverage types. Let's break down each one:

1. Professional Liability Insurance (Errors & Omissions)

Professional liability insurance, also called E&O insurance for accountants, is the cornerstone of accountant insurance. This coverage protects you when clients claim your professional services caused them financial harm.

What Professional Liability Insurance Covers:

Errors in Financial Statements - Mistakes in preparing financial reports, balance sheets, or income statements
Tax Preparation Errors - Incorrect calculations, missed deductions, or filing mistakes that trigger IRS penalties
Missed Deadlines - Failing to file returns or reports on time, causing client penalties
Negligent Advice - Providing incorrect guidance on tax strategies, business structures, or financial planning
Failure to Detect Fraud - Claims that you should have discovered embezzlement or financial misconduct during audits
Breach of Fiduciary Duty - Allegations of failing to act in the client's best interest
Legal Defense Costs - Attorney fees, court costs, and expert witness fees (even if claims are groundless)

Real Claim Example #1: Tax Calculation Error

Scenario: A CPA miscalculated depreciation on a client's commercial property, resulting in $45,000 in underpaid taxes over three years. The IRS assessed penalties and interest totaling $67,000.

Client Claim: The business owner sued the CPA for the full amount of taxes, penalties, and interest.

Resolution: The CPA's E&O policy paid $67,000 to settle the claim plus $23,000 in legal defense costs.

Total Claim Cost: $90,000

Real Claim Example #2: Missed Filing Deadline

Scenario: An accounting firm failed to file a client's S-Corp tax return by the deadline due to internal miscommunication. The client faced $15,000 in late filing penalties and lost a planned business loan due to incomplete tax documentation.

Client Claim: The client demanded $15,000 for penalties plus $100,000 in claimed damages for the lost business opportunity.

Resolution: After negotiation, the E&O carrier paid $35,000 in settlement plus $18,000 in defense costs.

Total Claim Cost: $53,000

Professional Liability Cost Ranges:

Practice Type	Annual Revenue	Typical Limit	Annual Premium Range
Solo CPA (tax prep focus)	$100K - $250K	$1M / $1M	$1,200 - $2,500
Small firm (2-5 CPAs)	$500K - $1M	$1M / $2M	$3,500 - $6,000
Mid-size firm (6-15 CPAs)	$2M - $5M	$2M / $2M	$8,000 - $15,000
Large firm (16+ CPAs)	$5M+	$5M / $5M	$25,000 - $75,000+

Note: Premiums vary based on services offered, claims history, years in practice, and geographic location.

2. Cyber Liability Insurance

Accountants handle extremely sensitive client data—Social Security numbers, bank account information, tax returns, and financial statements. A data breach can be catastrophic for your practice and your clients.

Cyber insurance for accountants has become essential, not optional. The accounting profession is a prime target for cybercriminals seeking financial data.

What Cyber Liability Insurance Covers:

Data Breach Response - Forensic investigation, notification costs, credit monitoring for affected clients
Ransomware Attacks - Ransom payments (where legal), data recovery costs, business interruption
Phishing Scams - Coverage when fraudulent wire transfers occur due to email compromise
Regulatory Fines - Penalties from state data breach notification laws and IRS data security requirements
Legal Defense - Lawsuits from clients whose data was compromised
Business Interruption - Lost income when your systems are down due to cyber attack
Cyber Extortion - Threats to release sensitive client data unless payment is made

Real Claim Example #3: Ransomware Attack

Scenario: A 7-person accounting firm was hit with ransomware that encrypted all client files, including tax returns for 850 clients, during peak tax season. The attackers demanded $50,000 in Bitcoin.

Impact: The firm couldn't access any client files for 11 days during their busiest period. They needed forensic investigation, data recovery services, client notification, and temporary staff to rebuild workload.

Resolution: Cyber insurance covered:

$50,000 ransom payment (to restore files quickly)
$28,000 in forensic investigation and IT security upgrades
$45,000 in business interruption (lost revenue for 11 days)
$12,000 for client notification and credit monitoring
$8,000 for PR firm to manage reputation damage

Total Claim Cost: $143,000

Real Claim Example #4: Email Phishing Scam

Scenario: A bookkeeper received what appeared to be an email from a long-time client requesting a wire transfer of $78,000 for a "time-sensitive business acquisition." The email was actually from hackers who had compromised the client's email.

Client Claim: The client demanded the bookkeeping firm reimburse the stolen $78,000.

Resolution: The cyber policy's social engineering coverage paid $78,000 to the client, plus $7,000 in investigation costs.

Total Claim Cost: $85,000

Cyber Insurance Cost Ranges:

Firm Size	Number of Clients	Coverage Limit	Annual Premium Range
Solo practitioner	50 - 200 clients	$500K	$800 - $1,500
Small firm	200 - 500 clients	$1M	$1,800 - $3,500
Mid-size firm	500 - 2,000 clients	$2M	$4,500 - $8,000
Large firm	2,000+ clients	$5M	$12,000 - $25,000

Note: Premiums increase significantly if you've had previous cyber incidents or lack multi-factor authentication and other security controls.

3. Business Owner's Policy (BOP)

A Business Owner's Policy (BOP) bundles two essential coverages that every accounting practice needs: general liability and commercial property insurance.

General Liability Component Covers:

Bodily Injury - Client trips over cables in your office and breaks their wrist
Property Damage - You accidentally spill coffee on a client's laptop during a meeting
Personal Injury - Libel, slander, or advertising injury claims
Medical Payments - Small medical bills regardless of fault (typically $5,000 - $10,000)
Legal Defense - Defense costs even if lawsuits are frivolous

Commercial Property Component Covers:

Office Contents - Computers, servers, furniture, office equipment
Building Coverage - If you own your office building
Business Personal Property - Items you take to client sites
Business Interruption - Lost income if fire, theft, or covered peril shuts down your office
Equipment Breakdown - Server failures, HVAC breakdowns

Real Claim Example #5: Office Fire

Scenario: An electrical fire damaged a CPA firm's office, destroying computers, servers, client files, and office furniture. The firm couldn't operate from the office for 6 weeks during repairs.

Insurance Coverage:

$85,000 to replace computers, servers, furniture, and equipment
$42,000 in business interruption (6 weeks of lost revenue)
$8,500 for temporary office space rental
$12,000 for data recovery services

Total Claim Cost: $147,500

BOP Cost Ranges:

Practice Type	Office Location	Property Limit	Annual Premium Range
Home-based practice	Home office	$25K - $50K	$500 - $900
Small office	Leased space	$50K - $150K	$1,200 - $2,000
Mid-size firm	Owned building	$250K - $500K	$2,500 - $4,500
Large firm	Multi-floor office	$500K+	$5,000 - $12,000

4. Workers Compensation Insurance

If you have employees—whether full-time CPAs, part-time bookkeepers, or administrative staff—workers compensation insurance is required by law in almost every state.

What Workers Comp Covers:

Medical Expenses - Doctor visits, hospital stays, surgery, physical therapy, medications
Lost Wages - Typically 2/3 of regular wages while employee can't work
Permanent Disability - Lump sum or ongoing payments for permanent injuries
Vocational Rehabilitation - Job retraining if employee can't return to previous role
Death Benefits - Benefits to dependents if work-related injury causes death
Legal Protection - Employees typically can't sue you for workplace injuries when workers comp is in place

Real Claim Example #6: Repetitive Stress Injury

Scenario: A staff accountant developed severe carpal tunnel syndrome requiring surgery after years of computer work. The employee needed surgery, 8 weeks of recovery, physical therapy, and permanent ergonomic accommodations.

Workers Comp Paid:

$18,000 in medical expenses (surgery and therapy)
$12,000 in lost wages (8 weeks at 2/3 pay)
$3,500 in ergonomic equipment (special keyboard, desk, chair)
$8,000 in permanent partial disability settlement

Total Claim Cost: $41,500

Workers Comp Cost Ranges:

Employee Type	Rate per $100 Payroll	$50K Salary Cost	$100K Salary Cost
Clerical/Admin Staff	$0.35 - $0.75	$175 - $375	$350 - $750
Professional Accountants	$0.50 - $1.00	$250 - $500	$500 - $1,000
Partners/Owners (if included)	$0.50 - $1.00	$250 - $500	$500 - $1,000

Note: Rates vary significantly by state. California, New York, and Illinois typically have higher rates; Indiana, Texas, and Florida typically have lower rates.

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Top Insurance Carriers for Accountants

Not all insurance carriers understand the unique needs of accounting professionals. Here are the leading carriers specializing in accountant insurance and CPA insurance:

The Hartford

The Hartford is one of the most trusted names in professional liability insurance for accountants and CPAs. With over 200 years of insurance experience, Hartford offers comprehensive coverage tailored specifically to accounting professionals.

Why Accountants Choose Hartford:

Specialized E&O Coverage - Policies designed specifically for accounting risks, including tax preparation errors, audit mistakes, and missed deadlines
Broad Industry Appetite - Hartford actively writes coverage for solo CPAs, small firms, mid-size practices, and large regional accounting firms
Cyber Insurance Integration - Seamless cyber coverage that works alongside professional liability
Claims Support - Dedicated claims team with accounting industry expertise
Risk Management Resources - Free client engagement letters, document retention guides, and best practice materials
Financial Stability - A.M. Best A+ rating (Superior) financial strength

Typical Coverage Packages from Hartford:

Professional Liability: $1M - $5M per claim
Cyber Liability: $500K - $5M per incident
Business Owner's Policy: Customized limits based on office size
Workers Compensation: State-mandated coverage

Other Leading Carriers for Accountants:

Hiscox

Excellent for small firms and solo practitioners. Known for quick online quotes and simplified underwriting. Strong cyber coverage bundled with E&O. Premium range typically 10-15% lower than Hartford for solo practices.

CNA (Accountants Professional Liability - APL Program)

Specialized program exclusively for accounting professionals. Comprehensive coverage with excellent tail coverage options. Preferred by larger firms with 25+ employees. More rigorous underwriting but competitive rates for established firms.

Travelers

Strong professional liability coverage with flexible policy terms. Good option for multi-state practices. Comprehensive risk management tools and loss prevention resources. Competitive rates for firms with clean claims history.

Chubb

Premium carrier favoring larger, established accounting firms with sophisticated risk management. Higher limits available ($10M+). More expensive but broader coverage terms. Excellent claims handling reputation.

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Coverage Comparison: Hartford vs. Competitors

Feature	Hartford	Hiscox	CNA	Travelers
Best For	All sizes, especially small-mid firms	Solo CPAs & small firms	Mid to large firms	Multi-state practices
E&O Limits	Up to $5M	Up to $2M	Up to $10M	Up to $5M
Cyber Coverage	Excellent	Excellent	Very Good	Good
Online Quotes	Through agents	Yes, instant	Through agents	Through agents
Price Point	Competitive	Lower (solo)	Higher (comprehensive)	Competitive
Claims Reputation	Excellent	Very Good	Excellent	Very Good

How Much Does Accountant Insurance Cost?

The cost of CPA insurance varies widely based on your specific risk profile. Here's what affects your premium:

Factors That Impact Your Premium:

Annual Revenue - Higher revenue typically means higher premiums (more client exposure)
Services Offered - Tax prep is lower risk than auditing or forensic accounting
Claims History - Previous claims or lawsuits significantly increase rates
Years in Practice - New CPAs pay more than established practices with long track records
Number of Clients - More clients = more potential claim scenarios
Coverage Limits - Higher limits cost more, but incremental increases are often affordable
Geographic Location - California, New York, and Florida have higher rates due to litigation frequency
Risk Management Practices - Firms with strong internal controls, client engagement letters, and documented procedures get better rates

Solo Practitioner Coverage

Typical profile: Individual CPA with 50-200 clients, primarily tax preparation and bookkeeping services.

Recommended coverage package:

Professional Liability (E&O): $1M/$1M
Cyber Liability: $500K
BOP (if office outside home): $50K-$100K property

Annual cost range: $1,800 - $3,400

Small Firm Coverage

Typical profile: 2-10 employees, mix of tax, bookkeeping, and consulting services.

Recommended coverage package:

Professional Liability (E&O): $1M/$2M or $2M/$2M
Cyber Liability: $1M
BOP: $100K-$250K property
Workers Compensation: Based on payroll

Annual cost range: $8,000 - $18,000

Complete Package Cost Examples:

Example 1: Solo CPA (Tax Preparation Focus)

Practice: Solo practitioner, 15 years experience, 200 individual tax clients, no employees
Annual Revenue: $180,000
Location: Suburban Ohio

Annual Insurance Costs:

Professional Liability ($1M/$1M): $1,800
Cyber Liability ($500K): $950
BOP (home office): $650
Workers Comp: $0 (no employees)

Total Annual Cost: $3,400 (1.9% of revenue)

Example 2: Small Accounting Firm

Practice: 3 CPAs + 2 bookkeepers, general accounting & audit services
Annual Revenue: $850,000
Location: Urban Texas

Annual Insurance Costs:

Professional Liability ($2M/$2M): $5,200
Cyber Liability ($1M): $2,800
BOP (leased office): $1,800
Workers Comp (5 employees): $3,200

Total Annual Cost: $13,000 (1.5% of revenue)

Example 3: Mid-Size Firm with Audit Practice

Practice: 12 CPAs, audit and attestation services, SEC client work
Annual Revenue: $3.2 million
Location: California

Annual Insurance Costs:

Professional Liability ($5M/$5M): $28,000
Cyber Liability ($3M): $9,500
BOP (owned building): $4,200
Workers Comp (15 employees): $12,000

Total Annual Cost: $53,700 (1.7% of revenue)

Common Policy Exclusions to Watch For

Understanding what your accountant insurance doesn't cover is just as important as knowing what it does. Here are critical exclusions:

Professional Liability Exclusions:

Prior Acts - Claims arising from work done before your policy inception date (unless you have prior acts coverage)
Known Claims - Issues you knew about before buying insurance
Intentional Misconduct - Fraud, criminal acts, or deliberately false statements
Investment Advice - Unless you have separate securities licenses and specific coverage
Bookkeeping Services - Sometimes excluded on CPA policies (needs separate endorsement)
Payroll Processing - Often excluded unless specifically added
Business Valuation - May require separate coverage or endorsement

Cyber Insurance Exclusions:

Acts of War - State-sponsored cyber attacks
Prior Breaches - Security incidents you knew about before coverage began
Unencrypted Devices - Some policies exclude coverage for data on unencrypted laptops/devices
Infrastructure Failures - General IT failures not related to cyber attack
Betterment - Upgrades beyond your pre-loss systems

Critical Gap: Tax Penalties

Most professional liability policies do not cover tax penalties or interest assessed by the IRS or state tax authorities on your firm's returns. They only cover penalties your errors caused for clients.

If you personally owe back taxes due to late filings, you're not covered. Make sure you understand this limitation.

How to Reduce Your Insurance Costs

While CPA insurance is essential, there are legitimate ways to reduce your premiums without sacrificing coverage:

Risk Management Best Practices:

Use Client Engagement Letters - Define scope of work clearly for every client. Carriers love documented scopes and give discounts.
Implement Quality Control Reviews - Have a second CPA review returns and financial statements before delivery
Document Everything - Keep detailed notes of client conversations, decisions, and recommendations
Use Tax Software with Compliance Checks - Modern tax software with built-in error checking reduces mistakes
Maintain Client File Retention Policies - Keep records for required periods (typically 7 years)
Upgrade Cybersecurity - Multi-factor authentication, encrypted email, regular backups, and staff training all lower cyber insurance costs
Attend CPE Courses on Risk Management - Many carriers offer premium credits for risk management education

Policy Structure Strategies:

Higher Deductibles - Increasing your deductible from $2,500 to $10,000 can save 15-25% on professional liability premiums
Claims-Made vs. Occurrence - Claims-made policies (standard for E&O) are cheaper but require tail coverage when you switch carriers or retire
Bundle Coverage - Buying E&O, cyber, and BOP from the same carrier typically saves 10-15%
Multi-Year Policies - Some carriers offer discounts for 2-3 year policy commitments
Professional Association Discounts - AICPA members may qualify for group rates

What NOT to Do:

Don't underinsure - Saving $1,000 on premium isn't worth it when one claim exceeds your limits
Don't skip cyber coverage - "It won't happen to me" is a dangerous mindset in 2026
Don't let coverage lapse - Even a 1-day gap can void your protection for claims-made policies
Don't hide information from your insurer - Non-disclosure can void your entire policy

Special Considerations by Practice Type

Tax Preparation Services

If your practice is primarily tax preparation, you need:

Tax Season Extension - Ensure your policy covers extended deadline filings (October extensions)
IRS Penalty Coverage - Covers penalties you caused for clients (not your own penalties)
Preparer Tax Identification Number (PTIN) - Keep current; lapsed PTIN can void coverage
State Tax Authority Defense - Not just IRS—coverage for state audit defenses

Audit & Attestation Practices

If you perform audits, reviews, or compilations:

Higher Limits - Minimum $2M per claim, $5M aggregate recommended
SEC Coverage Endorsement - If you audit public companies, this is mandatory
Engagement Letter Requirements - Insurers mandate specific language in engagement letters
Peer Review Documentation - Many policies require proof of passing peer review

Forensic Accounting & Litigation Support

Litigation support work carries unique risks:

Expert Witness Coverage - Standard E&O may exclude expert witness work; needs special endorsement
Fraud Detection Exclusions - Some policies exclude "failure to detect fraud" claims
Court-Ordered Disclosure - Understand how your policy handles subpoenas for your work papers

Virtual/Cloud-Based Practices

Fully remote or cloud-based accounting firms need:

Expanded Cyber Coverage - Cloud storage, third-party vendor failures, and SaaS interruptions
Remote Employee Coverage - Workers comp extends to home offices
Data Center Business Interruption - Coverage when your cloud provider goes down
Geographic Territory - Ensure policy covers all states where you have clients

When Claims Happen: What to Expect

Despite your best efforts, claims can happen. Here's what the process looks like:

Step 1: Notice of Claim

Report potential claims immediately when you:

Receive a demand letter from a client or attorney
Discover a significant error that could lead to client damages
Get served with a lawsuit
Receive a subpoena related to your work
Have a client threaten legal action (even verbally)

Reporting timeline matters: Most policies require notice "as soon as practicable." Delays in reporting can jeopardize coverage.

Step 2: Carrier Investigation

Your insurer will:

Assign a claims adjuster to your case
Request documentation (engagement letter, work papers, correspondence)
Assign defense counsel (usually you can choose from their approved list)
Determine if claim is covered under your policy

Step 3: Defense

Your insurance company pays for:

Attorney fees and legal defense costs
Expert witnesses to support your defense
Court costs and filing fees
Deposition costs

Defense costs: Most E&O policies have "defense outside the limit" (defense costs don't reduce your coverage limit) or "defense within the limit" (defense costs eat into your limit). "Outside the limit" is better.

Step 4: Resolution

Claims typically resolve through:

Settlement - 70-80% of claims settle before trial (average timeline: 18-24 months)
Dismissal - 10-15% of claims are dismissed or withdrawn
Trial - 5-10% go to trial (average defense costs: $150,000 - $500,000+)

Pro Tip: Consent to Settle Clauses

Some policies have a "hammer clause" that reduces coverage if you refuse a reasonable settlement recommendation. Read this provision carefully. You want a policy that requires your consent to settle and doesn't penalize you for wanting to defend your reputation.

Tail Coverage: What You Need to Know

Professional liability insurance for accountants is typically written on a claims-made basis, meaning the policy only covers claims made during the policy period—even if the work happened years earlier.

What Is Tail Coverage?

Extended reporting period (ERP), commonly called "tail coverage," extends the time period in which you can report claims after your policy ends.

When You Need Tail Coverage:

Switching insurance carriers
Retiring from practice
Closing your firm
Going on extended leave
Changing practice structure (merger, acquisition)

Tail Coverage Costs:

Tail coverage is expensive—typically 1.5x to 3x your annual premium. For a CPA paying $5,000/year for E&O, tail coverage could cost $7,500 - $15,000 one-time fee.

Alternatives to Tail Coverage:

Prior Acts Coverage - Your new carrier covers work done before your policy started (often free or low cost)
Nose Coverage - Similar to prior acts; covers your historical work under new policy
Retirement Endorsement - Some carriers offer extended reporting at retirement for reduced cost if you've been with them for 5+ years

Bottom line: When switching carriers, ask your new carrier about prior acts coverage before buying expensive tail coverage from your old carrier. Often, nose coverage is cheaper than tail coverage.

How to Buy Accountant Insurance

Ready to protect your accounting practice? Here's the step-by-step process:

Step 1: Assess Your Coverage Needs

Consider:

Annual revenue and projected growth
Services you offer (tax prep, audit, bookkeeping, consulting)
Number of clients and client types (individuals, small business, corporations)
Number of employees
Office location (owned vs. leased, home office vs. commercial)
Technology and cybersecurity measures in place

Step 2: Get Multiple Quotes

Contact at least 3-5 carriers or independent insurance agents specializing in professional liability. Provide:

Completed insurance application (be thorough and honest)
Current and past 5 years of revenue
Claims history (if any)
Description of risk management practices
Sample engagement letter
Professional licenses and credentials

Step 3: Compare Coverage Terms, Not Just Price

Look beyond premium cost. Compare:

Coverage Limits - Per claim and aggregate
Deductibles - Self-insured retention amounts
Defense Costs - Inside or outside the limit?
Prior Acts Coverage - How far back does coverage extend?
Tail Coverage Costs - What's the ERP multiplier if you need to cancel?
Consent to Settle - Do you have to agree to settlements?
Sublimits - Are certain services or coverages limited?
Exclusions - What's specifically not covered?

Step 4: Review and Bind Coverage

Before binding:

Read the full policy, not just the declarations page
Verify all information on the application is accurate
Ensure policy inception date has no coverage gaps
Get all endorsements and amendments in writing
Understand reporting requirements for claims and incidents

Step 5: Implement Risk Management

After buying insurance:

Share policy terms with your partners/staff
Update client engagement letters to match policy requirements
Set calendar reminders for policy renewal (90 days before expiration)
Document your risk management practices for annual renewals
Keep insurance agent contact info accessible

Frequently Asked Questions

Do I need insurance if I'm just starting my accounting practice?

Yes—arguably more than established firms. New CPAs face higher risks due to smaller client bases (each client is a larger % of revenue), less experience, and tighter cash flow. Many claims arise from work done in your first 3-5 years of practice. Start with at least $1M/$1M professional liability coverage from day one.

Can I get insurance if I've had previous claims?

Yes, but expect higher premiums and possibly a higher deductible or exclusion for specific types of work. Carriers will ask for detailed information about previous claims, including nature of the claim, amount paid, and what you've done to prevent similar issues. Be prepared to demonstrate improved risk management practices.

What if a client is unhappy but hasn't sued me yet?

Report it to your insurance carrier as a "potential claim" or "circumstance that could lead to a claim." Most policies have a provision allowing you to report circumstances before formal claims are made, which locks in coverage under your current policy even if the actual lawsuit comes after your policy renews or changes carriers.

Does my insurance cover work I did before buying the policy?

Only if you have prior acts coverage (also called "nose coverage" or retroactive date coverage). When buying your first E&O policy, ask for full prior acts coverage back to when you started practicing. When switching carriers, ensure your new policy covers all prior work or buy tail coverage from your old carrier.

Is cyber insurance really necessary for small accounting firms?

Absolutely. Small firms are often targets because they lack enterprise-level security but handle valuable data. Ransomware attacks, email phishing scams, and data breaches can bankrupt an uninsured practice. With cyber insurance starting around $800-$1,200 annually for solo practitioners, it's one of the best investments you can make.

What happens to my coverage when I retire?

You need extended reporting period (tail) coverage to protect yourself from claims that arise after retirement for work you did while practicing. Some carriers offer discounted retirement tail coverage if you've been insured with them for 5+ consecutive years. Plan for this cost in your retirement budget—it can be substantial.

Can I exclude certain services to lower my premium?

Yes, if you don't perform certain higher-risk services (like audits, SEC work, or business valuations), you can exclude them to reduce premium. However, make sure exclusions match your actual practice—if you occasionally do the excluded work, you have zero coverage. Be conservative: if there's any chance you'll offer a service, keep it covered.

Next Steps: Get Protected Today

Insurance isn't exciting, but it's essential. A single claim can wipe out years of profits or even force you to close your practice. With the right accountant insurance coverage from carriers like The Hartford and others, you can practice with confidence knowing you're protected.

Action Items:

Review your current coverage - When did you last update your policies? Do your limits match your current revenue?
Add cyber insurance - If you don't have it yet, get quotes this week
Get competitive quotes - Insurance rates vary significantly between carriers
Implement risk management - Use engagement letters, document client communications, and maintain quality controls
Schedule annual reviews - Set a calendar reminder to review coverage every year before renewal

Ready to Get Covered?

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Last updated: February 2026. Insurance requirements, rates, and coverage terms vary by state and carrier. This guide provides general information only and does not constitute legal or insurance advice. Consult with a licensed insurance professional for coverage recommendations specific to your accounting practice.

Related Guides

How Much Does CPA E&O Insurance Cost? — Detailed pricing by firm size
Cyber Insurance for Accountants & CPAs — Protect client financial data
Insurance for Tax Preparers — Seasonal and year-round coverage
Best CPA Insurance Carriers Compared — Independent carrier rankings

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Table of Contents

What is Accountant Insurance?

Who Needs Accountant Insurance?

Essential Coverage Types for Accountants

1. Professional Liability Insurance (Errors & Omissions)

What Professional Liability Insurance Covers:

Real Claim Example #1: Tax Calculation Error

Real Claim Example #2: Missed Filing Deadline

Professional Liability Cost Ranges:

2. Cyber Liability Insurance

What Cyber Liability Insurance Covers:

Real Claim Example #3: Ransomware Attack

Real Claim Example #4: Email Phishing Scam

Cyber Insurance Cost Ranges:

3. Business Owner's Policy (BOP)

General Liability Component Covers:

Commercial Property Component Covers:

Real Claim Example #5: Office Fire

BOP Cost Ranges:

4. Workers Compensation Insurance

What Workers Comp Covers:

Real Claim Example #6: Repetitive Stress Injury

Workers Comp Cost Ranges:

Top Insurance Carriers for Accountants

The Hartford

Why Accountants Choose Hartford:

Other Leading Carriers for Accountants:

Hiscox

CNA (Accountants Professional Liability - APL Program)

Travelers

Chubb

Coverage Comparison: Hartford vs. Competitors

How Much Does Accountant Insurance Cost?

Factors That Impact Your Premium:

Solo Practitioner Coverage

Small Firm Coverage

Complete Package Cost Examples:

Example 1: Solo CPA (Tax Preparation Focus)

Example 2: Small Accounting Firm

Example 3: Mid-Size Firm with Audit Practice

Common Policy Exclusions to Watch For

Professional Liability Exclusions:

Cyber Insurance Exclusions:

How to Reduce Your Insurance Costs

Risk Management Best Practices:

Policy Structure Strategies:

What NOT to Do:

Special Considerations by Practice Type

Tax Preparation Services

Audit & Attestation Practices

Forensic Accounting & Litigation Support

Virtual/Cloud-Based Practices

When Claims Happen: What to Expect

Step 1: Notice of Claim

Step 2: Carrier Investigation

Step 3: Defense

Step 4: Resolution

Tail Coverage: What You Need to Know

What Is Tail Coverage?

When You Need Tail Coverage:

Tail Coverage Costs:

Alternatives to Tail Coverage:

How to Buy Accountant Insurance

Step 1: Assess Your Coverage Needs

Step 2: Get Multiple Quotes

Step 3: Compare Coverage Terms, Not Just Price

Step 4: Review and Bind Coverage

Step 5: Implement Risk Management

Frequently Asked Questions

Do I need insurance if I'm just starting my accounting practice?

Can I get insurance if I've had previous claims?

What if a client is unhappy but hasn't sued me yet?

Does my insurance cover work I did before buying the policy?

Is cyber insurance really necessary for small accounting firms?

What happens to my coverage when I retire?