Here's what most accountants don't realize until they need it: the insurance package that saved you money when you started your practice might actually be costing you protection now. If you're running an accounting or CPA firm, you've probably heard about Business Owner's Policies (BOPs). They're the bundle deals of business insurance—general liability and commercial property wrapped together at a discount. But as your firm grows, those one-size-fits-all packages start showing their gaps. The question isn't whether insurance matters. It's whether you're buying the right kind.
What's Actually in a BOP?
A Business Owner's Policy bundles two core coverages: general liability and commercial property insurance. For accounting firms, the average BOP costs about $56 per month with $1 million per occurrence and $2 million aggregate limits, plus a $500 deductible. That's roughly $672 annually for coverage that protects you if someone slips and falls in your office or if your computers get destroyed in a fire.
The appeal is obvious: bundling saves you 15-30% compared to buying general liability and property insurance separately. Accounting firms are among the lucky industries here—your general liability premiums average just $675 annually because you're considered low-risk. You're not operating heavy machinery or dealing with hazardous materials. You're working with spreadsheets and tax returns.
But here's the catch that trips up most accounting professionals: a BOP doesn't cover your actual work. That bookkeeping error that cost your client thousands? The tax advice that turned out to be wrong? The audit you conducted that missed a major discrepancy? None of that falls under a BOP. You need professional liability insurance—also called errors and omissions (E&O) coverage—for claims arising from your professional services. And that's always a separate policy.
When a BOP Makes Sense for Your Accounting Firm
BOPs are designed for small, low-risk businesses, and accounting firms often fit that profile perfectly. If your firm has fewer than 100 employees and brings in less than $5 million in annual revenue, you're typically eligible. Most insurers consider professional services like accounting, law, and consulting to be ideal BOP candidates because there's minimal physical risk involved.
A BOP works best when you're just starting out or running a lean operation. Maybe you're a solo CPA with a small office, a few computers, and basic furniture. You see clients occasionally, but most of your work happens at a desk. Your biggest physical risks are someone tripping over a power cord or a burst pipe damaging your equipment. In that scenario, a BOP gives you solid protection without overcomplicating things.
The cost savings matter too. With 88% of finance and accounting businesses choosing the standard $1 million per-occurrence and $2 million aggregate limits, you're getting predictable, affordable coverage. For a small firm watching every expense, paying $56 a month for bundled coverage beats paying separate premiums for general liability and property insurance that could total $900 or more annually.
When You Need to Move Beyond a BOP
Growth changes everything. As your firm expands, you start hitting the limitations of a one-size-fits-all policy. First, there's the professional liability gap. BOPs simply don't cover claims from professional errors or omissions, and that's where most accounting firms face their real exposure. If a client sues because you made a mistake on their tax return or missed something in an audit, you're on your own unless you have separate E&O coverage.
Then there's the coverage limit issue. BOP limits typically range from $300,000 to $4 million, which sounds like a lot until you're dealing with high-value clients. If you're conducting audits for companies worth millions or advising clients with complex financial portfolios, the standard $2 million aggregate limit might not cut it. One major lawsuit could blow through that coverage, leaving your firm's assets exposed.
The rising cost of claims adds another layer of concern. Over the past four years, inflation has driven up legal fees, forensic accounting costs, and settlement amounts. What used to be a $200,000 claim might now cost $350,000 to defend and resolve. Standalone policies let you customize your coverage limits to match your actual risk exposure, rather than hoping a generic BOP will be enough.
Specialized coverage needs also push firms toward standalone policies. If you have unique risk areas—maybe you specialize in forensic accounting, handle international clients, or provide litigation support—a BOP's standardized coverage might have exclusions that leave you vulnerable. Standalone policies can be tailored to your specific practice areas, ensuring you're protected where it actually matters.
The Real Cost Comparison
Let's break down what you're actually paying. A typical accounting firm pays about $25 to $31 per month for general liability insurance alone—that's roughly $300 to $372 annually. Add commercial property insurance (varies widely based on your equipment value and location), and you might hit $700 to $900 total for separate policies. Or you could get both in a BOP for around $672 annually, saving 15-25%.
But you still need professional liability insurance either way, and that's not negotiable for accounting firms. E&O coverage costs vary based on your firm size, services offered, and claims history, but you're looking at additional premiums that often exceed what you pay for general liability. When you factor in professional liability as a necessary standalone policy regardless of whether you have a BOP, the calculation shifts. The question becomes whether the BOP's GL and property bundle meets your needs, or whether you need higher limits and customization that only standalone policies provide.
For firms exceeding 100 employees or $5 million in revenue, BOPs usually aren't even an option. You're automatically in standalone territory, where insurers assess your specific risk profile and price coverage accordingly. This often costs more upfront but gives you protection that actually matches your exposure.
Making the Right Choice for Your Firm
Start by honestly assessing your firm's risk profile. Are you a small practice with standard bookkeeping and tax preparation services? A BOP probably covers your physical risks just fine. But if you're conducting audits, providing expert testimony, or serving high-net-worth clients, you need the flexibility and higher limits that standalone policies offer.
Check whether your state CPA board or professional organizations have minimum coverage requirements. Some mandate specific professional liability limits that might influence your overall insurance structure. You don't want to discover you're underinsured when you're trying to maintain your license or membership.
Consider your growth trajectory too. If you're planning to expand your team, add services, or target larger clients in the next few years, building relationships with standalone policy providers now might make more sense than switching later when you outgrow your BOP. Insurers often offer better rates to established clients with clean claims histories.
Next Steps: Getting Your Coverage Right
The insurance industry is built on packages and bundles because they're profitable and easy to sell. But your firm's protection shouldn't be based on what's convenient for insurers. Get quotes for both BOPs and standalone policies with identical coverage limits so you can compare apples to apples. Look beyond the premium—examine the exclusions, coverage limits, and whether the policy actually addresses your firm's specific risks.
Most importantly, recognize that professional liability insurance isn't optional—it's the core coverage for accounting firms. Whether you bundle your general liability and property coverage in a BOP or buy them separately, you absolutely need E&O protection. That's where your real exposure lives, and that's where inadequate coverage can put your entire practice at risk. Talk to an insurance agent who specializes in professional services to make sure you're covered where it counts, not just where it's cheap.
