How much does accountant and CPA insurance cost?

Professional liability insurance costs an average of $45 per month, or $537 annually, for accountants and CPAs. This coverage is also called errors and omissions (E&O) insurance or malpractice insurance.

A professional liability insurance policy covers the cost of lawsuits over claims that your accounting services were unsatisfactory, negligent, or late.

For instance, if you fail to submit a client's tax return on time or provide investment advice that causes your client to lose money, a professional liability policy would cover your legal defense costs, settlement, and other financial losses if the client sues over professional negligence.

Below is the average professional liability insurance policy for accountants and CPAs who buy from Insureon:

Premium: $45 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000

Several factors influence the cost of professional liability insurance, including the types of professional services you offer, your claims history, and the policy limits you choose.

As with other types of insurance, you can save money on professional liability coverage by choosing lower limits or a higher deductible.

Reducing your risks also helps you avoid claims of negligence, which in turn helps keep your premium low. This includes clear communication with clients and thorough documentation of all communications and agreements.

Accounting professionals pay an average of $30 per month, or $357 annually, for general liability insurance. This policy is sometimes called public liability insurance.

General liability insurance covers common third-party risks at accounting companies, such as a client who slips in your office and suffers a bodily injury, or accidental damage to a client's property.

For example, if you drop and break a client's smartphone while showing them new tax laws, general liability insurance coverage would pay for the repair costs or legal costs if the client sues over property damage.

It also helps pay for attorney's fees and other legal expenses if someone sues your business over copyright infringement or other advertising injuries, including defamation.

Below is the average general liability policy for accountants and CPAs who buy from Insureon:

Insurance premium: $30 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The per-occurrence limit is the maximum your insurer will pay for a single covered incident, while the aggregate limit is the most the insurer will pay for all liability claims during the policy period, typically one year.

General liability insurance costs depend on factors such as the coverage limits and deductible you choose, the types of financial services you offer, your business income, and any additional insured endorsements you select.

Learn more about how your insurance premium is calculated and how to save money on your general liability coverage.

Accountants, CPAs, and auditors spend an average of $80 per month, or $964 per year, on cyber insurance. This policy is also called cyber liability insurance or cybersecurity insurance.

Cyber insurance helps accounting businesses recover financially after a cyberattack or data breach. It can cover data breach investigations, cyber extortion payments, and costs related to complying with your state's data breach laws.

A cyber liability insurance policy is especially crucial for accounting business owners who store sensitive client information, such as credit card information, Social Security numbers, and email addresses.

The cost of cyber insurance and the coverage you need depend on the amount of sensitive information you handle at your accounting practice.

For accounting companies, the average cost of workers’ compensation insurance is $34 per month, or $404 annually.

This policy covers medical expenses and lost wages related to employee injuries. It usually includes employer's liability insurance to protect against lawsuits from workers who get injured or ill on a jobsite.

Businesses with employees typically must purchase workers' comp to comply with state requirements and avoid penalties.

For example, all finance businesses in California, Pennsylvania, and New York must carry workers' comp if they have one or more full-time or part-time employees. Florida businesses need coverage when they have four or more employees, and coverage is optional in Texas.

Since health insurance plans can deny claims for injuries related to your job, workers' comp coverage is also recommended for self-employed accounting professionals as a financial safety net against medical bills and for peace of mind.

The cost of workers' comp depends on several factors, primarily the number of employees you have and their occupational risks. You can save money on workers' comp coverage by classifying your employees correctly and implementing a risk management plan to avoid work-related injuries and subsequent claims.

For financial service businesses, the average premium for a fidelity bond is $38 per month, or $454 annually.

Fidelity bonds provide reimbursement if one of your employees commits fraud, theft, or forgery against a client or your business, including illegal electronic funds transfer. They are often required by client contracts.

The cost of a fidelity bond primarily depends on the size of the bond. It is usually a small percentage of the bond's total amount of coverage.