Accountants Professional Liability Insurance

When managing finances, preparing tax returns, or offering financial advice, accountants face significant professional risks. A single mistake, omission, or misinterpretation can lead to costly lawsuits. Accountants professional liability insurance—also known as errors and omissions (E&O) insurance—protects accounting professionals from claims related to professional negligence.

This guide explains what it covers, why it’s essential, and how accountants can secure the best policy at the right price.

What Is Accountants Professional Liability Insurance?

Accountants professional liability insurance is a specialized form of coverage designed to protect accountants, bookkeepers, and tax preparers against lawsuits claiming:

• Negligence in financial reporting

• Errors in tax filings

• Failure to detect fraud

• Incorrect financial advice

Even with the highest standards of professionalism, mistakes happen. Without coverage, a single claim can drain finances, damage reputation, and jeopardize your career.

Why Is It Important for Accountants?

1. High Legal Costs – Defending against malpractice claims can cost tens of thousands of dollars, even if you’re not at fault.

2. Client Expectations – Many clients demand proof of insurance before working with an accountant.

3. Protection for Small Firms – Independent accountants or small practices are particularly vulnerable to financial strain from lawsuits.

4. Reputation Security – Insurance provides financial backing so you can focus on maintaining client trust.

What Does Accountants Professional Liability Insurance Cover?

Typical policies include coverage for:

• Defense Costs – Attorney fees, court expenses, and settlements

• Errors and Omissions – Mistakes in bookkeeping, audits, or financial statements

• Negligence Claims – Failure to provide accurate advice or services

• Regulatory Investigations – Assistance in responding to official inquiries

How Much Does It Cost?

Premiums depend on factors like:

• Size of your practice

• Years of experience

• Claims history

• Services offered (e.g., tax preparation, auditing, advisory)

On average, small accounting firms pay between $800 and $2,000 per year for coverage.

How to Get the Best Policy

• Compare multiple carriers – Coverage and pricing vary widely.

• Choose adequate limits – At least $1M per claim is recommended for most accountants.

• Bundle with other business policies – Combining liability coverage with general business insurance can lower costs.

• Work with experienced brokers – Agencies with access to multiple insurers can secure better rates and terms.

FAQs About Accountants Professional Liability Insurance

1. Is professional liability insurance mandatory for accountants?
Not always, but many clients require it, and it’s strongly recommended to protect your practice.

2. What’s the difference between professional liability and general liability insurance?
General liability covers physical risks (slip-and-fall accidents, property damage). Professional liability covers financial loss from professional mistakes.

3. Does it cover intentional fraud?
No. Coverage applies to errors, omissions, or negligence—not deliberate misconduct.

4. Do tax preparers need professional liability insurance?
Yes. Even minor tax errors can lead to IRS penalties and client lawsuits.

Secure Your Practice Today

As an accountant, your clients rely on your expertise to safeguard their financial future. Protect yourself with accountants professional liability insurance tailored to your needs.

With over 30 years of experience, THAgency compares nearly 100 carriers to find you the best price for the best coverage.

👉 Fill out the form below to get your personalized quote today. Start now and see your options instantly—it’s fast, secure, and tailored to you.