If you run an accounting firm or work as a CPA, you've probably heard plenty about professional liability insurance—also called errors and omissions coverage. That's the policy that protects you when clients claim your tax advice or audit work caused them financial harm. But here's what surprises many accounting professionals: you also need general liability insurance, and it covers something completely different.
General liability insurance protects your accounting practice from bodily injury and property damage claims—the physical risks that happen in everyday business operations. Think of it as coverage for the real world: a client trips over a file box in your office lobby, your associate spills coffee on a client's laptop during a meeting, or someone slips on your freshly mopped floor. These scenarios have nothing to do with your professional accounting work, but they can still result in expensive lawsuits that threaten your business.
What General Liability Insurance Covers for Accounting Firms
General liability insurance covers third-party claims against your accounting business for bodily injury, property damage, and personal and advertising injury. The standard policy limits are $1 million per occurrence and $2 million aggregate annually—meaning the insurance company will pay up to $1 million for any single claim and up to $2 million total for all claims during your policy period.
Bodily injury protection kicks in when someone gets hurt at your office or because of your business operations. The most common scenario for accounting firms is the classic slip-and-fall: a client walks into your office for a tax appointment, doesn't notice the wet floor sign near the entrance, and falls, breaking their wrist. Your general liability policy covers their medical bills, lost wages if they miss work, and legal defense costs if they sue. These claims can easily reach tens of thousands of dollars, but your policy handles them.
Property damage coverage protects you when your business or employees damage someone else's property. For CPAs, this might look like an employee knocking over a client's expensive vase during an office visit, or accidentally damaging equipment at a client's business location. If you're visiting a client's restaurant to review their books and your laptop bag knocks their point-of-sale system off the counter, breaking it, general liability covers the replacement cost.
Personal and advertising injury protection is the third component, covering claims of libel, slander, copyright infringement, or invasion of privacy in your marketing materials. While less common for accounting firms than bodily injury claims, this coverage protects you if, say, you use a competitor's copyrighted material in your advertising or accidentally make false statements about another firm in your promotional content.
Why Accounting Firms Need Both General and Professional Liability
Here's where many CPAs get confused: don't these policies overlap? The answer is no—they're designed to work together, covering completely different types of risks. Professional liability insurance protects you from financial harm caused by your professional services. If you miss a tax deadline, make an error in an audit, or give incorrect financial advice that costs a client money, that's what professional liability handles.
General liability, on the other hand, has nothing to do with your accounting expertise. It covers physical incidents and property damage—the kinds of accidents that could happen at any business, whether you're running a CPA firm or a bakery. You need both because you face both types of risks. Your professional work carries the risk of financial errors, while your physical office space and business operations carry the risk of injuries and property damage.
Most accounting firms carry both types of coverage because clients, landlords, and business partners often require proof of general liability insurance. If you're leasing office space, your landlord will almost certainly demand a certificate of insurance showing general liability coverage before you sign the lease. Corporate clients frequently require accounting firms to carry both professional and general liability before they'll hire them. Without general liability, you'll lose business opportunities and limit your firm's growth.
How Much Does General Liability Cost for CPAs?
The good news is that general liability insurance for accounting firms is remarkably affordable. CPAs and accounting professionals pay an average of $30 per month, or about $357 annually, for general liability coverage. Some firms pay as little as $22 per month ($266 annually), while others with larger offices or more employees might pay closer to $35 monthly ($420 annually). This is significantly less expensive than professional liability insurance, which typically costs $45 to $60 per month or more.
Several factors influence your premium. Larger firms with more employees face higher premiums because more people in the office means more opportunities for accidents. Your location matters too—operating in more litigious states like California or New York can increase premiums by 15-30% due to higher legal costs and settlement amounts. Your claims history is one of the most important factors: a clean record over the past five years typically qualifies you for the best rates, while previous claims can raise your premium.
Many accounting firms save money by purchasing a Business Owner's Policy, or BOP, which bundles general liability with commercial property insurance. A BOP typically costs around $60 per month ($719 annually) and provides comprehensive coverage for both liability and property risks at a discounted rate compared to buying the policies separately. If you own equipment, furniture, or maintain inventory in your office, a BOP is often the most cost-effective choice.
Common Claims Scenarios for Accounting Firms
Understanding what general liability actually covers becomes clearer when you look at real-world scenarios. Slip-and-fall cases are the most common general liability claims across all industries, and accounting firms are no exception. A client arrives for their annual tax planning meeting, doesn't notice the loose carpet in your hallway, trips, and injures their knee. They need surgery and physical therapy costing $45,000. Your general liability policy covers their medical expenses and your legal defense if they sue for additional damages.
Property damage claims happen less frequently but can still be costly. Imagine your associate is conducting an on-site visit to a client's retail store to review inventory systems. While setting up their laptop, they accidentally knock over the client's point-of-sale system, cracking the screen and damaging the card reader. The replacement costs $3,500. Without general liability insurance, your firm would pay that out of pocket. With coverage, your policy handles the claim.
Water damage is another common scenario. Your office's sprinkler system malfunctions during business hours, soaking the waiting area where several clients have left their coats and bags. Two laptops and a designer handbag are ruined, totaling $4,200 in damaged property. General liability covers the replacement cost for your clients' belongings. Without it, you'd be responsible for reimbursing them directly, potentially straining client relationships and your firm's finances.
How to Get General Liability Insurance for Your Accounting Firm
Getting general liability coverage is straightforward. Start by gathering basic information about your practice: your firm's annual revenue, number of employees, office location, and square footage. Most insurance carriers offer online quotes that take just 10-15 minutes to complete. You'll receive quotes showing different coverage limits—while $1 million per occurrence and $2 million aggregate is standard, some firms working with large corporate clients may want higher limits like $2 million per occurrence.
Consider whether you need additional coverages beyond basic general liability. Cyber liability insurance is increasingly important for CPAs who store sensitive client financial data electronically. Employment practices liability protects against wrongful termination and discrimination claims if you have employees. Workers' compensation is legally required in most states once you hire your first employee. Many insurance providers offer package policies that bundle these coverages together at a discount.
Don't wait until you need coverage to start shopping. Most policies have a waiting period before coverage begins, and you can't file claims for incidents that happened before your policy effective date. If you're just starting your practice, get insurance before you sign your office lease or meet with your first client. For established firms without coverage, purchase a policy immediately—the average monthly cost is less than what you'd charge for two hours of billable work, making it one of the most cost-effective business protections available.
General liability insurance fills a critical gap in your accounting firm's risk management strategy. While your professional expertise is your most valuable asset, the physical space where you work and meet clients creates real liability exposure. For less than the cost of a monthly software subscription, general liability insurance protects your firm from potentially devastating bodily injury and property damage claims, satisfies client and landlord requirements, and gives you peace of mind to focus on serving your clients. Combined with professional liability coverage, it creates a comprehensive protection package that every accounting practice needs.
