How Much Does Bookkeeper Insurance Cost in 2026?

One of the most common questions we hear from bookkeepers is: "How much will insurance cost me?" The short answer is typically $300-$1,200 per year for a solo practitioner. But let's dig into what really drives those numbers.

Average Costs by Coverage Type

Professional Liability (E&O) Insurance

• Solo bookkeeper: $350-$600/year

• Small firm (2-5 employees): $600-$1,500/year

• Medium firm (6-20 employees): $1,500-$5,000/year

  Cyber Liability Insurance

• Solo bookkeeper: $300-$500/year

• Small firm: $500-$1,200/year

• Medium firm: $1,200-$3,500/year

  General Liability Insurance

• Solo bookkeeper: $300-$500/year

• Small firm: $500-$900/year

• Medium firm: $900-$2,000/year

  Business Owner's Policy (BOP)

• Solo bookkeeper: $500-$800/year

• Small firm: $800-$1,500/year

• Medium firm: $1,500-$3,000/year

  Factors That Affect Your Premium

  1. Your Annual Revenue

  Insurance companies view revenue as a proxy for exposure. More revenue generally means:

• More clients

• More transactions

• More opportunities for errors

• Higher potential claim values

  A bookkeeper with $50,000 in annual revenue will pay significantly less than one with $500,000.

  2. Services You Provide

  Not all bookkeeping services carry the same risk:

  Lower Risk Services:

• Basic bookkeeping and data entry

• Bank reconciliation

• Accounts payable/receivable

  Higher Risk Services:

• Tax preparation and filing

• Payroll processing

• Financial consulting/advisory

• CFO services

  Expect to pay 20-40% more if you offer tax preparation services.

  3. Number of Employees

  More employees means:

• More people who can make mistakes

• Higher likelihood of claims

• Need for workers' compensation coverage

  4. Claims History

  If you've had previous E&O claims, expect higher premiums. Insurers view past claims as predictive of future risk. The good news: claims eventually "age off" (typically after 5-7 years).

  5. Policy Limits and Deductibles

  Higher limits cost more:

• $500,000/$1,000,000 limits are standard

• $1,000,000/$2,000,000 adds about 15-25%

• $2,000,000/$4,000,000 adds about 40-60%

  Higher deductibles reduce premiums:

• $1,000 deductible is common

• $2,500 deductible saves about 10-15%

• $5,000 deductible saves about 20-25%

  6. Geographic Location

  Some states have higher claim frequencies and legal costs:

• California, New York, Florida: Higher premiums

• Midwest and rural states: Generally lower

  7. Professional Credentials

  Interestingly, CPAs and EAs may pay slightly more than unlicensed bookkeepers because they're held to higher professional standards—and clients expect more from them.

  Sample Premium Scenarios

  Scenario 1: Solo Home-Based Bookkeeper

• Revenue: $60,000/year

• Services: Bookkeeping only (no tax)

• No employees

• No claims history

  Estimated Annual Premiums:

• Professional Liability ($500K/$1M): $375

• Cyber Liability ($500K): $325

• Total: ~$700/year (about $58/month)

  Scenario 2: Small Bookkeeping Firm

• Revenue: $250,000/year

• Services: Bookkeeping + payroll + tax prep

• 3 employees

• No claims history

  Estimated Annual Premiums:

• Professional Liability ($1M/$2M): $1,200

• Cyber Liability ($1M): $750

• General Liability ($1M/$2M): $600

• Workers' Comp: $1,800

• Total: ~$4,350/year (about $363/month)

  Scenario 3: Virtual Bookkeeping Company

• Revenue: $500,000/year

• Services: Full-service remote bookkeeping

• 8 employees (including virtual)

• One prior claim (resolved)

  Estimated Annual Premiums:

• Professional Liability ($1M/$2M): $2,400

• Cyber Liability ($1M): $1,100

• General Liability ($1M/$2M): $850

• Workers' Comp: $4,200

• EPLI: $1,200

• Total: ~$9,750/year (about $813/month)

  Tips for Getting the Best Rates

  1. Bundle Your Policies

Many insurers offer 10-20% discounts when you combine:

• Professional liability + cyber liability

• General liability + property (BOP)

• Multiple coverage types with one carrier

  2. Maintain Good Risk Management

Document your quality control procedures. Insurers may offer credits for:

• Engagement letter requirements

• Peer review processes

• Continuing education

• Quality control manuals

  3. Shop Around

Get quotes from multiple insurers. Rates can vary significantly—sometimes 30-50%—for identical coverage.

4. Consider Higher Deductibles

If you have cash reserves, a higher deductible can significantly reduce premiums while still protecting against catastrophic claims.

5. Review Annually

Don't auto-renew without reviewing. Your situation may have changed, and new options may be available.

Is Insurance Worth the Cost?

Let's do the math:

Cost of insurance: $500-$1,200/year

Cost of a single claim (uninsured):

• Average legal defense: $20,000-$50,000

• Average settlement: $15,000-$75,000

• Potential total: $35,000-$125,000+

  ROI calculation: Insurance costs roughly the same as 1-2 hours of legal defense fees. If you face even one claim over your career, insurance pays for itself many times over.

  Plus, insurance is a tax-deductible business expense—reducing your effective cost by your marginal tax rate.

  Get Your Personalized Quote

  Every bookkeeping practice is unique. The best way to know your actual cost is to get a customized quote based on your specific situation.

  Get your free quote in minutes →

  Our specialists understand bookkeeping practices and can help you find the right coverage at competitive rates.