Accountants Errors & Omissions Insurance
Professional liability coverage for CPAs, bookkeepers, tax preparers, and forensic accountants.
This is an estimate, not a bound policy — a licensed VAB producer confirms final terms before coverage starts. Sgt. Savings can answer questions but can't quote, bind, or guarantee coverage.
Tax and accounting work carries a liability exposure that shows up long after the engagement ends — an audit finding, a penalty a client blames on your advice, an executor role gone sideways. Accountants Errors & Omissions covers audit/attest/review/compilation work, bookkeeping and payroll, tax planning and preparation, forensic accounting, business valuation, and executor/trustee services, with Loss extended to cover client penalties directly caused by your negligent error.
Who This Is Really For
The ideal buyer.
The ideal buyer is a CPA firm or bookkeeping practice that has taken on responsibilities beyond straightforward tax prep — audit/attest work, a client's executor role, or ERISA-adjacent plan accounting — and is realizing at renewal time that their coverage needs to actually name those activities rather than assume they're bundled into generic accountant E&O. The trigger is frequently a specific engagement: a longtime client asks the firm's principal to serve as executor of their estate, or the firm picks up a small retirement plan's non-fiduciary accounting work, and someone asks whether that's actually covered before they agree. This buyer has usually already had the uncomfortable experience of a client blaming a tax penalty on their advice, even informally, and specifically values that the loss definition here extends to penalties and interest the client wouldn't have owed with a correctly prepared return — a distinction that matters because it's exactly the claim pattern their profession sees most. They are evaluating this as a firm that already understands professional liability conceptually and wants the specific carve-backs — executor/trustee, non-fiduciary ERISA work — that match what their practice actually does.
- CPA firms performing audit, attest, review, or compilation work
- Bookkeeping and payroll service providers
- Tax preparers and firms representing clients before taxing authorities
- Forensic accountants and business valuation specialists
- Accountants serving as executor or personal trustee for a client's estate
- Firms wanting bar-style disciplinary proceeding defense costs covered separately
What It Covers
Coverage, broken down.
Core accounting and tax professional services
Covers public accountancy (audit/attest/review/compilation), bookkeeping/payroll, tax planning/preparation/representation before taxing authorities, forensic accounting, and business valuation.
Client penalty and interest extension
Extends Loss to cover client tax penalties and interest directly caused by the accountant's negligent error — not the underlying tax owed, which was always the client's obligation.
Executor and personal trustee carve-back
Carves back the standard D&O-style exclusion so negligence in an executor or personal-trustee role tied to accounting work is covered — a role many accountants take on for longtime clients.
ERISA carve-back for non-fiduciary plan work
Restores coverage for non-fiduciary plan accounting and audit work, which the base ERISA exclusion would otherwise block.
Disciplinary proceeding & subpoena defense expense (optional)
Covers the cost of responding to a licensing board proceeding or subpoena, separate from an underlying client claim.
Illustrative Scenario — How This Coverage Responds
Illustrative scenario — a tax preparation error
An accountant prepares a client's tax return but negligently misapplies a deduction, and the error is later caught in an audit, resulting in penalties and interest the client wouldn't have owed with a correctly prepared return. The client sues to recover the added penalties and interest. Accountants E&O responds to the claim, since the Loss definition specifically extends to client tax penalties and interest directly caused by the accountant's negligent error — not the underlying tax liability itself, which was always owed.
Illustrative example for education only — not a claim outcome or a promise of payment. Every claim depends on the actual policy issued and its terms.
More Than One Way In
More scenarios.
Real coverage doesn't fit one story. Here's who else this shows up for.
The longtime client's estate
A CPA who has done a family's taxes for two decades is asked to serve as executor of the family patriarch's estate, and the firm needs to confirm that role is covered before the CPA agrees.
The small plan's non-fiduciary accounting work
A firm picks up accounting and audit work for a client's small 401(k) plan in a non-fiduciary capacity, and needs to understand where the ERISA exclusion's carve-back actually starts and stops.
The disciplinary inquiry without a client lawsuit
A state board of accountancy opens an inquiry into a firm's compilation report after a whistleblower complaint, with no client having filed suit, and the firm wants defense costs covered for that proceeding specifically.
Know The Gaps
What this doesn't cover.
Every policy has limits. Knowing them before you buy is how you avoid a denied claim later.
Audit or attest work for publicly-traded, SEC-reporting issuers
Public-company audit work carries a materially different risk and regulatory profile — firms doing that work need specialized coverage built for it, not standard accountants E&O.
Attorney, actuary, real estate, mortgage, insurance-agent, broker-dealer, RIA, or asset-manager services, or commission-based compensation
If your firm also holds licenses for these other services, or takes commissions rather than fees, that activity isn't covered under this policy unless it's pure tax/accounting/financial-planning advice with no product recommendation attached.
Client entities you or a family member owns more than 10% of or controls
Standard conflict-of-interest exclusion across professional liability — accounting work for your own business interests isn't a third-party claim this covers.
Estate or trust work where the accountant is a named beneficiary
Another conflict-of-interest carve-out — the executor/trustee carve-back doesn't extend to situations where you personally benefit from the estate.
Bankruptcy trustee, receiver, or guardian roles
These are distinct fiduciary roles with their own bonding and liability requirements, separate from standard accounting engagement liability.
Failure to procure insurance or bonds
An accountant isn't generally on the hook for a client's insurance or bonding decisions — that duty, if it exists at all, belongs to an insurance professional.
Behind The Quote
What goes into the decision.
What actually moves your price and your approval — no black box.
Scope of services performed
Audit and attest work in particular carries a materially different risk profile than bookkeeping or basic tax prep, which is why public-company audit work is excluded outright.
Fiduciary and executor/trustee engagements
The base policy carves back this exposure but excludes it when the accountant is a named beneficiary, so whether and how often the firm takes on these roles, and for whom, is directly relevant.
Client industry concentration
Certain client industries — regulated, high-litigation, or financially distressed sectors — carry more downstream tax-penalty and audit-finding exposure than others.
Compensation structure
Commission-based compensation for non-accounting products falls outside this policy, so how the firm is actually compensated across its service lines matters.
Prior claims, penalties, or disciplinary history
Given the client-penalty extension is central to this line, a firm's history of tax-preparation disputes is directly relevant underwriting information.
Let's get you covered.
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Availability
Available to accounting and bookkeeping firms nationwide, placed and administered state by state.
Questions, answered straight
No jargon on accountants errors & omissions insurance — just what you're actually asking.
Yes — the Loss definition specifically extends to client tax penalties and interest directly caused by your negligent error. It doesn't cover the underlying tax itself, since that was always owed regardless of the error.
Yes, as long as the accountant isn't a named beneficiary of that estate — the executor/trustee carve-back specifically restores coverage for that role, with the conflict-of-interest exclusion as the one carve-out.
No — audit or attest work for publicly-traded, SEC-reporting issuers is excluded and needs specialized coverage built for that higher-risk exposure.
No, non-fiduciary plan accounting and audit work is specifically carved back into coverage — the ERISA exclusion is narrowed to exclude only fiduciary-level plan liability.
Yes, with the optional Disciplinary Proceeding & Subpoena Defense Expense reimbursement — it covers licensing board proceedings and subpoena responses independently of an underlying client claim.
Beyond This Coverage
What people in your situation also need.
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Learn moreReady to talk it through?
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Insurance products described on this page are marketed by The Veteran Alliance, a licensed insurance producer, and underwritten by one or more separately licensed insurance companies, which may include Corgi Insurance Company and its affiliates. The insurer that actually underwrites your policy, its licensing status in your state, and any state-required notices will be identified in your quote and policy documents. Coverage, limits, eligibility, and pricing are determined by the underwriting insurer, may vary by state, and may change. Nothing on this page is a quote, an offer of insurance, a binder, or a guarantee of coverage — coverage takes effect only when a policy is issued.