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)

Compare Hartford vs Chubb pricing for CPAs →

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.

Jump to cost calculator →

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

Get instant quotes from top carriers →

Core Coverage Information:

What is Accountant Insurance?
Hartford vs Chubb: Which is Better for CPAs?
Essential Coverage Types for Accountants

CPA-Specific Protection:

Tax Preparation E&O Coverage
Client Data Breach Protection
Audit Defense Coverage
Real Claim Scenarios 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

Learn more about professional liability insurance for service providers and how it applies to your practice.

Hartford vs Chubb for CPA Insurance

⚡ Why use a brokerage platform instead of buying direct? These carriers let you buy directly — but you'll only see that one carrier's price. A brokerage platform like Insura shops 10+ carriers behind the scenes to find the lowest rate for your exact business. The price you pay is the same whether you buy direct or through a broker — carriers pay the broker's commission, not you.

Both Hartford and Chubb are top-tier carriers for accounting professional insurance, but they serve different needs. Here's how they compare specifically for CPAs and accounting firms in 2026:

Hartford: Best for Most CPAs

Ideal for: Solo CPAs, small to mid-size firms (1-25 employees), tax-focused practices

Strengths:

Competitive Pricing - Generally 15-25% lower premiums than Chubb for similar coverage
Specialized CPA Program - Dedicated underwriting team for accounting professionals
Flexible Underwriting - More lenient on startups and firms with limited claims history
Easy Claims Process - Known for quick claim response and reasonable settlement approaches
Strong Cyber Integration - Excellent bundled cyber coverage with E&O policies

Pricing Examples for Hartford (2026 rates):

Firm Profile	E&O Limit	Annual Premium	Deductible
Solo CPA, $150K revenue, 5 years experience	$1M/$1M	$1,800	$2,500
3-person firm, $600K revenue, tax & bookkeeping	$1M/$2M	$4,200	$5,000
10-person firm, $2M revenue, some audit work	$2M/$2M	$9,500	$10,000
25-person firm, $5M revenue, full-service	$5M/$5M	$28,000	$25,000

Chubb: Best for Established, High-Revenue Firms

Ideal for: Mid to large firms (20+ employees), firms with complex audit practices, high-net-worth client base

Strengths:

Highest Limits Available - Up to $10M+ per claim for large practices
Broader Coverage Terms - Fewer exclusions and more comprehensive policy language
Premium Service - White-glove claims handling and risk management consultation
Financial Stability - Among the most financially stable insurers globally (A++ rating)
Complex Risk Appetite - Better for firms with SEC clients, international operations, or specialized services

Pricing Examples for Chubb (2026 rates):

Firm Profile	E&O Limit	Annual Premium	Deductible
Solo CPA, $150K revenue, 5 years experience	$1M/$1M	$2,400	$2,500
3-person firm, $600K revenue, tax & bookkeeping	$1M/$2M	$5,500	$5,000
10-person firm, $2M revenue, some audit work	$2M/$2M	$11,800	$10,000
25-person firm, $5M revenue, full-service	$5M/$5M	$32,000	$25,000
50-person firm, $15M revenue, SEC clients	$10M/$10M	$85,000	$50,000

Direct Comparison: Hartford vs Chubb

Feature	Hartford	Chubb
Best for Firm Size	Solo to 25 employees	20+ employees
Price Point	15-25% lower	Premium pricing
Maximum E&O Limits	Up to $5M	Up to $10M+
Underwriting Speed	2-5 business days	5-10 business days
Claims Handling	Excellent, efficient	Exceptional, thorough
Cyber Coverage Integration	Excellent, easy bundling	Very good, separate policy
Startup Friendliness	Very flexible	Prefers established firms
SEC/Audit Client Work	Limited appetite	Strong appetite
Policy Exclusions	Standard	Fewer exclusions
Financial Strength Rating	A+ (Superior)	A++ (Superior)

Bottom Line: Which Should You Choose?

Choose Hartford if:

You're a solo CPA or small firm (under 20 employees)
You're primarily focused on tax preparation and bookkeeping
Price is a significant factor in your decision
You want easy bundling with cyber and BOP coverage
You're a newer practitioner (under 5 years)

Choose Chubb if:

You're a mid to large firm (20+ employees)
You perform audit work or have SEC clients
You need limits above $5M
You want the most comprehensive coverage terms available
You have complex operations (international, specialized services)

Or get quotes from both: Many CPAs find that the premium difference is smaller than expected, making Chubb's broader coverage worth the extra cost. Always compare both carriers before deciding.

Get instant quotes from Hartford and Chubb →

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)

For more details on how E&O works across professions, read our guide to errors and omissions insurance.

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.

Get personalized E&O quotes →

Tax Preparation Specific Coverage

Tax preparation represents one of the highest-risk services for accountants. E&O policies for CPAs include specific provisions for tax-related claims that are essential to understand.

What Tax Prep E&O Covers:

1. Mathematical Errors and Calculation Mistakes

Wrong tax bracket calculations
Incorrect depreciation schedules
Miscalculated estimated tax payments
Arithmetic errors in schedules and forms

2. Missed Deductions and Credits

Overlooking eligible business deductions
Failing to claim available tax credits
Not advising clients on timing strategies for deductions
Missing retirement contribution opportunities

3. Filing Deadline Failures

Missing extension deadlines
Late filing of quarterly estimated payments
Failure to file required state returns
Missing FBAR or international reporting deadlines

4. Tax Law Misinterpretation

Misunderstanding new tax legislation
Incorrect application of tax code provisions
Wrong choice of entity classification advice
Errors in multi-state tax calculations

5. IRS Representation Coverage

Legal fees for representing clients in IRS audits
Appeals and Tax Court representation
Penalty abatement request assistance
Coverage for negotiated settlements with IRS

Real Claim Example #7: Missed Tax Credit Costs CPA $125K

Scenario: A CPA prepared taxes for a manufacturing client and failed to identify eligibility for the R&D tax credit. Over three tax years, the client missed out on $380,000 in legitimate tax credits. A new CPA discovered the oversight during a tax review.

Client Claim: The manufacturer sued for $380,000 in lost tax benefits plus $50,000 in accounting fees to file amended returns.

Resolution: The E&O policy paid $125,000 in settlement (reduced because amended returns could still claim 2 of the 3 years) plus $42,000 in defense costs.

Total Claim Cost: $167,000

Lesson: Tax prep E&O covers not just errors made, but also beneficial provisions you failed to identify for clients.

Real Claim Example #8: State Tax Nexus Oversight

Scenario: A CPA advised an e-commerce client that they only needed to file taxes in their home state. The client had significant sales in California, which triggered California nexus requirements. After three years, California assessed $95,000 in back taxes and penalties.

Client Claim: The business demanded $95,000 plus $15,000 in costs to resolve the California matter.

Resolution: The E&O carrier paid $78,000 in settlement plus $28,000 in legal defense.

Total Claim Cost: $106,000

Lesson: Multi-state tax advice requires specialized knowledge. If you're not sure, refer out or get additional coverage for multi-state tax advice.

Tax Season Extensions and Policy Timing

Most tax work happens between January and April, but amended returns, extensions, and IRS notices continue year-round. Your E&O policy must cover:

Extended filing deadlines (October for personal returns, September for corporate)
Amended return preparation for 3+ prior years
Multi-year audit representation (IRS can go back 3-7 years)
Notice response work for returns filed years ago

Critical tip: When switching E&O carriers, ensure your retroactive date (prior acts coverage) extends back to when you started preparing taxes, not just your current policy inception. A gap here leaves you exposed for all prior tax work.

Learn more about professional liability coverage →

Client Data Breach Protection for CPAs

CPAs and accounting firms are prime targets for cybercriminals because you store exactly what hackers want: Social Security numbers, bank account details, tax returns, financial statements, and business financial data.

2. Cyber Liability Insurance

Cyber insurance for accountants has become essential, not optional. The accounting profession is consistently among the top 5 industries targeted for cyber attacks.

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

Learn more about cyber liability insurance for professional services.

Real Claim Example #3: Ransomware Attack During Tax Season

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 (March 28, 2025). 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 during critical tax season)
$28,000 in forensic investigation and IT security upgrades
$45,000 in business interruption (lost revenue for 11 days at peak season rates)
$12,000 for client notification and credit monitoring for 850 clients
$8,000 for PR firm to manage reputation damage

Total Claim Cost: $143,000

Annual cyber premium for this firm: $2,800

Real Claim Example #4: Email Phishing Scam Costs $78K

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 through a phishing attack.

Client Claim: The client demanded the bookkeeping firm reimburse the stolen $78,000, arguing the firm should have verified the unusual request via phone.

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

Total Claim Cost: $85,000

Lesson: Cyber insurance with social engineering coverage is critical for accounting firms. This coverage protects you when client email accounts are compromised and fraudulent payment requests appear legitimate.

Real Claim Example #9: Laptop Theft Exposes 400 Client Tax Returns

Scenario: A CPA's laptop was stolen from a car during a client meeting. The laptop contained unencrypted copies of 400 client tax returns with full SSNs, addresses, and financial information.

Legal Requirement: State breach notification laws required the CPA to notify all 400 clients, offer credit monitoring, and report the breach to state authorities.

Costs:

$18,000 for forensic investigation and breach assessment
$24,000 for credit monitoring services (400 clients × $60 per person)
$8,500 for legal fees (breach notification compliance)
$12,000 for PR and client communication
$6,500 in state regulatory fines

Total Claim Cost: $69,000

Cyber insurance covered: $67,500 (full coverage minus $1,500 deductible)

Lesson: Device encryption is not optional. Many cyber policies now require encryption of all devices containing client data. Without it, coverage may be denied or severely limited.

CPA-Specific Cyber Threats in 2026

Tax Season Phishing Attacks: Cybercriminals time attacks to tax season when CPAs are overwhelmed and more likely to click suspicious links.

Client Portal Breaches: If you use client portals for document sharing, you're responsible for their security. Breaches at third-party providers may not be covered unless you have specific vendor management coverage.

IRS Impersonation Scams: Hackers impersonate IRS or state tax authorities via email to trick CPAs into revealing credentials or downloading malware.

W-2 Phishing: Scammers pose as company executives and email CPAs requesting all employee W-2 forms, which are then used for tax fraud.

Required Cyber Controls for Coverage (2026)

Most cyber insurers now require these minimum security controls for accounting firms:

✓ Multi-factor authentication (MFA) on all systems
✓ Encrypted email for client communication
✓ Full disk encryption on all laptops and mobile devices
✓ Regular data backups (daily, stored offline or in secure cloud)
✓ Endpoint detection and response (EDR) software
✓ Security awareness training for all staff (annually minimum)
✓ Documented incident response plan

Without these controls, your cyber insurance application may be declined or subject to significant exclusions.

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.

Get cyber insurance quotes for your firm →

Audit Defense Coverage

When your clients get audited by the IRS or state tax authorities, they often look to you for help—and expect you to pay for representation if errors in your work triggered the audit.

What Audit Defense Covers:

IRS Audit Representation

Attorney and CPA fees to represent clients during IRS examinations
Preparation costs for audit response documentation
Appeals representation if initial audit assessment is unfavorable
Tax Court representation for disputed assessments

State Tax Authority Defense

Multi-state audit defense (California, New York, etc.)
Sales tax audit representation
State income tax dispute resolution
Nexus challenge defense

Regulatory Investigation Defense

State Board of Accountancy investigations
IRS Preparer Penalty assessments
PCAOB inspections (for firms auditing public companies)
State professional licensing board complaints

Real Claim Example #10: IRS Audit Triggers $45K Defense Costs

Scenario: A CPA prepared a Schedule C for a consultant client, deducting $85,000 in home office and vehicle expenses. The IRS audited the return and disallowed $52,000 in deductions, claiming inadequate documentation. The client demanded the CPA pay for representation.

Defense Costs:

$12,000 in CPA fees to gather documentation and represent client at IRS meeting
$8,000 in attorney fees for appeals preparation
$18,000 in additional attorney fees for Tax Court petition
$7,000 in expert witness fees (vehicle use specialist)

Resolution: After 14 months, the Tax Court settlement allowed $38,000 of the original $52,000 disallowed deductions. Client avoided $14,000 in additional taxes.

Insurance Coverage: E&O policy paid $45,000 in defense costs. Client remained responsible for the $14,000 in additional taxes (insurance doesn't cover clients' tax liabilities, only defense costs).

Total Claim Cost to Insurer: $45,000

Real Claim Example #11: State Nexus Audit Cascades to 4 States

Scenario: A CPA advised an online retailer they had no state tax filing obligations outside their home state of Texas. California conducted a nexus audit and determined the retailer had filing obligations in California, New York, Illinois, and Washington. All four states initiated audits simultaneously.

Defense Costs:

$35,000 for multi-state tax attorney (coordinating all 4 state audits)
$28,000 in CPA forensic work (reconstructing 3 years of state-by-state sales data)
$12,000 in state tax resolution specialists
$8,000 in travel and administrative costs for state audit meetings

Resolution: Negotiated settlements with all 4 states totaling $215,000 in back taxes and penalties for the client. The CPA's firm was sued for $150,000 (portion of penalties attributed to bad advice).

Insurance Coverage: E&O policy paid $83,000 in audit defense costs plus $67,000 to settle the malpractice claim.

Total Claim Cost to Insurer: $150,000

Lesson: Multi-state tax advice is complex and high-risk. Consider referring multi-state matters to specialists or obtaining higher E&O limits if you advise clients on state tax nexus.

Typical Audit Defense Sublimits

Many E&O policies include sublimits for audit defense:

Separate sublimit: $25,000 - $100,000 per client audit
Aggregate sublimit: $100,000 - $500,000 per policy year
Deductible: Often separate, lower deductible for audit defense ($1,000-$2,500)

Pro tip: If audit representation is a significant part of your practice, negotiate higher audit defense sublimits. The incremental premium cost is typically modest ($200-$500/year) compared to the protection it provides.

Real Claim Scenarios Every CPA Should Know

Beyond the specific examples above, here are additional real-world claim scenarios from 2024-2026 that illustrate why comprehensive insurance is essential:

Real Claim Example #12: Bookkeeping Error in Payroll Tax Deposits

Scenario: A bookkeeping firm miscalculated and failed to deposit adequate federal payroll taxes for a client over 8 quarters. The IRS assessed $127,000 in back taxes, penalties, and interest. The client's CFO faced personal liability as a responsible party.

Client Claim: The business sued the bookkeeping firm for $127,000 plus $35,000 in accounting fees to clean up the mess.

Resolution: E&O policy paid $95,000 in settlement (client shared some responsibility for not reviewing quarterly reports) plus $38,000 in defense costs.

Total Claim Cost: $133,000

Real Claim Example #13: Incorrect Retirement Plan Advice

Scenario: A CPA advised a 58-year-old client to take an early distribution from their 401(k) to fund a business startup, assuring them it was "penalty-free under the new rules." The client owed $42,000 in early withdrawal penalties because the CPA had confused the rules for 401(k) vs. IRA withdrawals.

Client Claim: The retiree sued for $42,000 in penalties plus $15,000 in emotional distress.

Resolution: E&O carrier paid $42,000 to cover the penalties plus $14,000 in legal defense.

Total Claim Cost: $56,000

Lesson: Retirement plan advice is a specialized area. If you're not certain of the rules, refer clients to retirement planning specialists or clearly document the limits of your advice.

Real Claim Example #14: Expense Categorization Triggers Audit Red Flags

Scenario: A CPA categorized $180,000 in business expenses as "Meals & Entertainment" when they should have been split between multiple categories. The unusual concentration of M&E expenses triggered an IRS audit flag. The audit expanded to all business expenses, taking 18 months to resolve.

Client Claim: The client demanded $48,000 to cover their CPA time spent on audit response and business disruption.

Resolution: E&O policy paid $28,000 in settlement plus $22,000 in defense costs.

Total Claim Cost: $50,000

Lesson: Proper expense categorization matters not just for accuracy, but to avoid audit triggers. Software can miscategorize expenses—always review for reasonableness.

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.

Get instant quotes from top carriers →

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.

Get instant quotes from top carriers →

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

Complete Cost Breakdown by Firm Size (2026)

Firm Size	Annual Revenue	E&O Premium	Cyber Premium	BOP Premium	Workers Comp	Total Annual Cost
Solo CPA	$100K-$250K	$1,200-$2,500	$800-$1,500	$500-$900	$0	$2,500-$4,900
Small Firm (2-5 CPAs)	$500K-$1M	$3,500-$6,000	$1,800-$3,500	$1,200-$2,000	$1,500-$3,000	$8,000-$14,500
Mid-Size Firm (6-15 CPAs)	$2M-$5M	$8,000-$15,000	$4,500-$8,000	$2,500-$4,500	$6,000-$12,000	$21,000-$39,500
Large Firm (16-30 CPAs)	$5M-$10M	$25,000-$45,000	$12,000-$20,000	$5,000-$8,000	$15,000-$25,000	$57,000-$98,000
Regional Firm (30+ CPAs)	$10M+	$75,000-$150,000+	$25,000-$50,000	$8,000-$15,000	$30,000-$60,000	$138,000-$275,000+

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)

Compare personalized quotes now →

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

Get competitive quotes to compare →

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

Learn more about insurance for tax preparation businesses.

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

Start your quote comparison now →

Why Use a Brokerage Platform Instead of Buying Direct?

When a carrier offers instant quote-and-bind on their website, it's convenient — but you're only seeing one carrier's rates. A brokerage platform like Insura changes that equation:

One application, multiple quotes. Fill out one form and get compared across 10+ A-rated carriers including Hartford, Chubb, Hiscox, and more. No need to re-enter your business info on five different websites.
The price is the same — or lower. Carriers pay the broker's commission directly. Your premium is identical to what you'd pay buying direct, and often lower because a broker can find a carrier that prices your specific risk more competitively.
We work for you, not the carrier. A direct carrier's website is designed to sell you their policy. A brokerage platform is designed to find you the best policy — we have no incentive to push one carrier over another.
Automated comparison shopping, year after year. When your policy renews, a brokerage platform automatically re-shops your coverage across carriers to make sure you're still getting the best rate. Buy direct, and you're locked into one carrier's renewal pricing with no leverage.
Licensed experts when you need them. Have a coverage question or need help with a claim? You get access to real brokers — not a carrier's customer service line reading from a script.

→ Get your free multi-carrier quote

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.

Read more about cyber insurance for small businesses.

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, Chubb, 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?

Get personalized accountant insurance quotes from Hartford, Chubb, and other top-rated carriers in minutes. Our insurance advisors specialize in coverage for CPAs and accounting firms.

Compare rates and coverage options tailored to your practice.

Get instant quotes from top carriers →

Ready to Protect Your Business?

Get instant quotes from Hartford, Chubb, and top carriers in 60 seconds.

Get Your Free Quote →

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

Professional Liability Insurance: Complete Guide — Understanding E&O coverage
Errors & Omissions Insurance Explained — How E&O protects professionals
Cyber Insurance for Small Businesses — Protect client financial data
Tax Preparer Insurance Guide — Seasonal and year-round coverage
Hartford vs Progressive Business Insurance — Carrier comparison

Don't limit yourself to one carrier's price. Insura compares Hartford, Chubb, Hiscox, and 20+ other carriers — the price is the same or less, and you'll know you got the best deal. Get your free multi-carrier quote →

Quick Start: Find Your Path

Solo CPA / Tax Preparer

Small Firm (2-10 people)

Just Need Pricing?

Why 5,000+ CPAs Trust These Carriers

Table of Contents

What is Accountant Insurance?

Who Needs Accountant Insurance?

Hartford vs Chubb for CPA Insurance

Hartford: Best for Most CPAs

Chubb: Best for Established, High-Revenue Firms

Direct Comparison: Hartford vs Chubb

Bottom Line: Which Should You Choose?

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:

Tax Preparation Specific Coverage

What Tax Prep E&O Covers:

Real Claim Example #7: Missed Tax Credit Costs CPA $125K

Real Claim Example #8: State Tax Nexus Oversight

Tax Season Extensions and Policy Timing

Client Data Breach Protection for CPAs

2. Cyber Liability Insurance

What Cyber Liability Insurance Covers:

Real Claim Example #3: Ransomware Attack During Tax Season

Real Claim Example #4: Email Phishing Scam Costs $78K

Real Claim Example #9: Laptop Theft Exposes 400 Client Tax Returns

CPA-Specific Cyber Threats in 2026

Required Cyber Controls for Coverage (2026)

Cyber Insurance Cost Ranges:

Audit Defense Coverage

What Audit Defense Covers:

Real Claim Example #10: IRS Audit Triggers $45K Defense Costs

Real Claim Example #11: State Nexus Audit Cascades to 4 States

Typical Audit Defense Sublimits

Real Claim Scenarios Every CPA Should Know

Real Claim Example #12: Bookkeeping Error in Payroll Tax Deposits

Real Claim Example #13: Incorrect Retirement Plan Advice

Real Claim Example #14: Expense Categorization Triggers Audit Red Flags

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

How Much Does Accountant Insurance Cost?

Factors That Impact Your Premium:

Complete Cost Breakdown by Firm Size (2026)

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