7 Best Professional Liability Insurance for Accountants & CPAs 

Thang Truong
Thang Truong
Updated on:

CPA’s and accountants have to keep up with numerous rules and regulations in the execution of their work. If they make a mistake or overlook a rule, they could be vulnerable to a lawsuit. That’s why they need professional liability insurance. The good news is that many insurance companies offers professional liability insurance coverage for accountants and CPAs and we recommend the following 7 providers.

The 7 best professional liability insurance for accountants and CPAs

We study several companies offering professional liability insurance for accountants and CPAs and here are our recommendations of the top 7 providers:

CoverWallet: Best for comparing online quotes

CoverWallet works with a number of partners to provide customers with two or three quotes to choose from. Sometimes they only return one quote, though, and as you can see, CoverWallet’s quote from Hiscox was almost double what Hiscox quoted us (see details below). However, there are two main differences in the two quotes that you should pay attention to:

  • For the CoverWallet quote we said we lived in PA and for Hiscox it was Colorado.
  • The coverage of Hiscox quote through CoverWallet is $1M/$1M, which is the standard coverage for professional liability insurance for accountants and CPAs. On the average, the coverage of Hiscox quote directly (see more details below) is for $300K/$1M

It is clear that location does affect how much you pay for professional liability insurance—it’s one of the main factors. The other main factor is the coverage level of the policy. There are other factors that we discuss below.

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CNA: Best for working with an agent

CNA is one of the biggest professional liability insurance companies. They work through agents only, so if you want a quote, you’ll have to call them. They offer many types of insurance a CPA or accountant might need, such as:

The website is a little dated and hard to read. There are some complaints on the BBB website, although not an overwhelming number—just three one-star reviews and 18 complaints over the last three years. However, CNA has documented responses to these complaints, which shows they are trying to make things right. 

The Hartford: Best for multiple policies

The Hartford offers many different types of policies a small business owner or sole proprietor would want, which means you can get all of your insurance through them. This makes things easier for the small business owner. 

You can get a quote online, if your request is simple and straightforward, but to complete the purchase you have to go through an agent. If you need more than $2 million dollars in coverage, you’ll have to look elsewhere. Also, the Hartford does not insure Alaska, Hawaii, or New Jersey. 

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Hiscox: Best Overall

Hiscox makes it easy to get a quote—just enter some basic information, and you’ll have a quote within minutes. Once you get a quote, you can purchase the policy online and you’ll be covered instantly. They have over half a million small business customers, and most of the reviews are excellent.

This is a quote for a CPA living in CO with $150,000 a year in revenue. 

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biBerk: Best for added cyber insurance

biBerk specializes in small business insurance. They claim they can save you up to 20% on your business insurance, although Hiscox quoted us a lower price. biBERK is part of Berkshire Hathaway, Warren Buffet’s company. 

They offer professional liability insurance in all 50 states, which is great in case you foresee moving or opening a business in a different state. Some types of insurance are not available in all 50 states, however, so you’ll have to keep that in mind. 

You can save 10% if you pay annually instead of month-to-month, and you can get cyber insurance included for just a few dollars more, making biBERK an affordable option. An accountant or CPA might want cyber insurance if you keep client’s financial information online, as you could get hacked. Also see more at the best cyber insurance companies.

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Berkley Select: Best for customer service

Berkley Select usually offers quotes through their Express Portal, although this service was down when we tried it (multiple times) and we were redirected to submit our application via email. 

Berkley Select is not a Berkshire Hathaway company. However, they have excellent financial strength. They focus on workers comp, product liability, and professional liability insurance. 

There are not a lot of reviews out there for Berkley Select. This could be a good thing, because people usually go to the internet to complain, so the fact that there aren’t many reviews means customer’s expectations were met. Even the BBB lists 0 reviews and no complaints. 

Hanover: Best for risk management education

The Hanover provides business insurance for a wide range of industries. They also have a variety of business insurance policies, including:

They have risk management solutions, meaning they will work with you to reduce the odds of a claim. If you do have a claim, you can file it 24/7. 

They don’t offer online quotes, preferring to work through agents. If you need some direction in what kind of insurance you need, an agent can provide guidance. Agents can also help you reduce your risks 

What is professional liability insurance for accountants and CPAs?

Professional liability insurance, or also called errors and omissions (E&O) protects you if you make a mistake or if you fail to meet a deadline. In addition, there are many rules and regulations that CPA’s and accountants need to keep track of, and it’s easy to overlook or omit one. 

Accountants and CPA’s work with money, which can be a very emotionally charged issue. It’s also very detailed work and it can be easy to make a mistake. You might also provide advice to your clients, and if that advice proves to be in error, the client could sue you. If you’re doing tax preparation for a client and you enter even one number incorrectly, this could affect the client’s bottom line and they could sue you. 

>>MORE: The Best Professional Liability Insurance Companies

What does professional liability insurance for accountants and CPA’s cover?

Professional liability insurance covers you for any mistakes you make, or anything you fail to do. It will cover your court costs, defense attorney fees, and any settlements the client wins. It covers:

  • Alleged errors
  • Professional negligence
  • Breach of duty
  • Misleading statements

For an accountant or a CPA, professional liability insurance is the most important policy, and you absolutely should not go without it. 

What doesn’t it cover?

Professional liability insurance only covers you in your work as an accountant or CPA. It does not cover clients who trip on their way to your office, and it does not cover you if you regularly drive around running errands for clients (those are different policies). It also doesn’t cover embezzling, illegal activities, or malicious acts. 

If an accounting firm has professional liability insurance, does it also need management liability insurance?

Maybe. Management liability insurance covers directors, officers, and management from litigation arising from decisions they make in the running of the company. It mainly protects the company from litigation by shareholders and employees, whereas professional liability insurance protects the employee when they make a mistake in their work.

How much does professional liability insurance for accountants and CPA’s cost?

As you can see from the quotes we obtained above, the cost of professional liability insurance for accountants and CPAs is from $40-$100 a month. How much you pay for professional liability insurance depends on things like:

  • Location
  • Claims history
  • Amount of revenue

Some states have higher rates because there are more lawsuits filed there. CPAs also tend to pay more for insurance because of the detailed and intricate nature of their work, which means a greater potential for error. Also, clients of CPA’s have higher expectations and CPA’s must adhere to strict professional standards. 

You should note that different companies will always offer different quotes. If you want to get the cheapest one, be sure to shop around with a few companies or with a digital broker like CoverWallet to compare several quotes and select the cheapest one.

>>MORE: How Much Does Professional Liability Insurance Cost?

How to find cheap professional liability insurance?

The best thing you can do to find less expensive professional liability 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. 

Tax preparer insurance: Cost, coverage, and providers

Similar to accountants and CPAs, tax preparers and tax prep services need professional liability insurance or errors & omissions insurance coverage to protect themselves from the claims related to negligence, errors and omissions in your work, misinterpretation, and inaccurate tax advice.

The cost of E&O insurance for tax preparers depends on several factors such as coverage limits, deductible amount, number of employees, years in businesses, and locations. It also varies by insurance companies. On average, an E&O policy costs an independent tax preparers $40 a month or $480 a year.

We recommend the following companies for tax preparers: CoverWallet, biBerk, and Liberty Mutual. Learn more at the best E&O insurance for tax preparers.

Last thoughts

Professional liability insurance is probably the most important type of business insurance an accountant or CPA needs. Protect yourself and your business.

Thang Truong
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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