Certified public accountants (CPAs) put themselves at risk because they handle a considerable amount of sensitive information and provide advice about their client’s finances. This is in addition to the risks other business people face.
The best way to control these risks is to get adequate CPA insurance. It is also called accounting or accountants’ insurance. This article will reveal the top insurers for this coverage for different reasons and explain what you need to know to secure the insurance you need to protect your operation.
- The best 5 CPA insurance companies
- What types of insurance do CPAs need?
- Is CPA insurance required?
- What are examples of situations covered by CPA insurance?
- Who needs CPA insurance?
- How much does CPA insurance cost?
- What factors affect the CPA insurance cost?
- How to find cheap CPA insurance
The best 5 CPA insurance companies
I’ve done the homework to come up with the best 5 CPA insurers for different reasons:
- CoverWallet: Best for CPAs who want to compare quotes
- Simply Business: Best for finding low-cost CPA coverage
- Hiscox: Best for CPAs who need specialized coverage
- THREE: Best for all-in-one coverage for CPAs
- Thimble: Best for fast CPA coverage
CoverWallet: Best for CPAs who want to compare quotes
Want to compare costs and coverages for CPA insurance in a single place? CoverWallet could help you do just that!
How is CoverWallet able to do this?
It’s a cutting-edge insurance provider. The firm has developed an advanced platform based on its own technology to ensure it can connect CPAs and others with the business insurance they need quickly and at a fair price. In most cases, you will receive quotes from two or three providers on a single screen.
The firm’s experts have used their extensive experience to make sure you only have to input the information needed to generate fast and accurate quotes.
You can feel confident knowing that CoverWallet is a part of Aon, an established company with a solid track record.
Once you get your quotes, CoverWallet makes it easy to purchase CPA insurance online or through an agent. When you get your policy through CoverWallet, it’s simple to manage your coverage online, including downloading a certificate of insurance, filing a claim, renewing your policy, and more.
Here is a sample quote for a CPA business from CoverWallet.
Simply Business: Best for finding low-cost CPA coverage
Simply Business isn’t just a company name: it’s how the insurer views small business insurance. It promises to make the process of buying it clear, simple, and mostly importantly the most affordable for small businesses.
The company was founded in 2005 as an online business insurance brokerage specializing in protecting CPAs and other small businesses.
The insurer will help you find the right insurance for your accounting practice at the most affordable price you can afford.
Simply Business is known for its:
- Fast and affordable coverage
- Ability to provide solutions tailored to the needs of individual CPAs and other businesses
- Flexibility when it comes to coverages and limits.
You owe it to yourself to get a quote from Simply Business for your CPA insurance.
Hiscox: Best for CPAs who need specialized coverage
Hiscox offers standard and specialized insurance coverage for certified public accountants.
It’s easy to buy CPA business insurance from Hiscox online. A rep can also help you customize your coverage and answer your questions over the phone.
If you choose Hiscox for your CPA business coverage, you can rest assured knowing you’re entrusting your protection needs to a firm in operation for well over a century. More than 400,000 smaller companies trust Hiscox for their insurance needs.
Hiscox is known for tailoring unique insurance solutions to the individual requirements of CPAs and other small businesses. The company offers top-tier service and provides fast quotes, instant coverage, and quick claims processing.
THREE: Best for all-in-one coverage for CPAs
If you prefer a single source for all your CPA business insurance coverage, THREE could be the IDEAL solution. It protects all aspects of a business, including people, property, and operations, all in a single complete business insurance policy.
You can also rest assured knowing that THREE is a part of the solid and established Berkshire Hathaway family of companies, a firm headed by well-known investor Warren Buffett. It’s known for offering top-tier coverage and outstanding claims processing.
Check out THREE to find out how it could make protecting your accounting business easy.
Thimble: Best for fast CPA coverage
Thimble is an online insurance provider that sells coverage to people who need CPA and other business insurance fast. Thimble does not provide insurance direct. Instead, different insurance companies underwrite its policies.
Thimble is a good option for businesses that need coverage quickly or temporarily. It’s also valuable for business owners who hire contractors, as many accounting firms do. You can use Thimble’s Certificate Manager to figure out the insurance needs for the people you’re hiring, and they can then purchase their coverage through Thimble.
With Thimble, you can get a quote and purchase insurance online in minutes. Plus, monthly, daily, and even hourly coverage is available through Thimble.
One issue with Thimble is that it doesn’t underwrite its policies. You’ll have to file claims with the insurer that provides your CPA coverage. Plus, Thimble customer service is only available online. This may not be ideal for CPAs who like to speak with someone over the phone, whether when shopping for insurance or after purchasing a policy.
Here is a sample CPA quote from Thimble.
What is CPA insurance?
CPA insurance helps protect CPAs and accounting firms from the unique risks people who work around numbers face, along with typical small business risks. This insurance is also referred to as accountant or accounting insurance.
What types of insurance do CPAs need?
CPA insurance needs can be complex. Many start with a Business Owner’s Policy (BOP). It provides many of the core coverages most small businesses need and makes it easy and cost-effective to add other types of insurance.
Business Owners Policy (BOP)
A BOP includes three core coverages:
- General liability insurance covers bodily injury claims to non-employees on your business property or damage to someone else’s property. Learn more at general liability insurance cost and the best general liability insurance companies.
- Commercial property insurance protects your owned or rented office (including a home office) and the equipment and supplies you use to operate your accounting business, including your:
- Business income insurance replaces a portion of your lost income if you can’t operate your CPA business for a reason covered by your insurance.
Professional liability insurance
Professional liability insurance (also known as errors and omissions (E&O) coverage) pays legal, defense, and settlement costs if you or an employee is sued over the accounting advice or services you provide, whether the suit is justified or not.
This is probably the most important coverage for CPAs. It covers both your negligence, your mistakes, and omissions. However careful and play-by-the-book you are, anyone can make some mistake. As a CPA, making a mistake may cost your clients a lot of money and they can sue you. This coverage will protect you when you are sued by your clients.
Cyber liability insurance
Cyber liability insurance pays costs to help your business recover from a cyberattack, including getting back the vast amount of sensitive data CPA businesses store.
This coverage is particular important to any CPA. As a CPA, you handle a lot of sensitive personal financial data of your clients. If you get hacked, these sensitive data will be in the hands of hackers and can cause big problems for your clients. They can sue you for these incidents. Without cyber liability protection, you can be bankrupt easily.
Commercial auto insurance
Commercial auto insurance protects you and your employees when driving personal or company vehicles for work-related reasons. Personal auto insurance won’t pay for accidents when driving for work.
Other insurance types that CPAs may need
Employment practices liability insurance covers you if an employee sues you for improper work practices like harassment or unjustified dismissal.
Workers’ compensation insurance (also known as workers’ comp) provides benefits, including medical expenses, disability, job retraining, death benefits, and more to employees who become injured or ill for work-related reasons.
Valuable papers and documents coverage pays to restore or replace essential records damaged while in your care.
Is CPA insurance required?
If you employ employees, you must have workers comp insurance. That is legally required by all 50 states, except Texas. If you use a vehicle for work purposes, you must have commercial auto insurance. That’s legally required by all 50 states.
Other than these two policies, no other CPA insurance policies are legally required in any states. However, all CPAs probably have professional liability insurance because it is almost always required by any accounting or tax preparing firms. Even if you work as a self-employed or independent contract CPA, you are highly encourage to get a professional liability insurance policy. Don’t skip on this coverage.
What are examples of situations covered by CPA insurance?
Here are a few scenarios:
- After years of sitting at a work desk too high for her, an accountant comes down with carpal tunnel syndrome. She is unable to return to work for several months. Workers’ comp will pay medical and recovery costs, along with lost income. Having the coverage also makes it almost impossible for the employee to sue you over the incident.
- An employee provides financial advice to a client, which causes them to lose thousands of dollars. Your firm is sued over it. Professional liability insurance will pay legal, defense, and settlement costs related to the lawsuit, which could be considerable.
- Your business computer system is hacked in a phishing attack. A large amount of sensitive data is exposed. Cyber liability insurance will pay costs related to the attack, including informing impacted parties, paying for credit monitoring services, and hiring a public relations service to restore your firm’s reputation.
- A burst pipe at an accounting firm ruins some critical documents stored under it. Valuable papers and records coverage pays to recreate important paperwork.
Who needs CPA insurance?
Any company offering services provided by CPAs can benefit from this coverage, including:
- Accounting firms
- Accounting private practices
- Billing services
- Circulation auditors
- CPA firms
- Payroll accounting businesses
- Payroll auditors
- Payroll preparation companies
- Tax preparation services.
How much does CPA insurance cost?
The average CPA insurance cost is $60 per month, or $720 per year. That is for a professional liability insurance policy, the most popular policy for CPAs.
If you add more coverages, you will pay more for your CPA insurance policy. Below are the average cost for different coverages that CPAs may need:
|CPA insurance coverages
|Professional liability insurance
|$60 per month
|General liability insurance
|$35 per month
|Cyber liability insurance
|$85 per month
|Workers comp insurance
|$89 per month
|Commercial auto insurance
|$110 per month
These are just the averages. Your rates will be different. Be sure to shop around with a few companies. Work with a top broker like Simply Business, InsurePro, or CoverWallet is a good way to get and compare several quotes in one place to find the cheapest one for you.
What factors affect the CPA insurance cost?
CPA insurance costs vary because every accounting firm is unique. Insurers look at different factors when determining premium prices, including:
- Accounting industry experience
- Claims history
- Location and number of locations
- Number of employees
- Time and distance spent driving for work
- Type of accounting work.
The best way to determine how much CPA insurance will cost is to get several quotes from different providers. You can compare premium prices and coverages to find the best deal for you.
How to find cheap CPA insurance?
The best thing you can do to find cheap CPA insurance is to shop around. Even if you have a policy in place already, it’s a good idea to compare quotes every two to three years, to see if you can find a cheaper rate.
You can also make sure you put all of your communications in writing and keep careful records. Make sure to send emails to clients when anything changes. Communicate and get everything in writing.