E&O Insurance for Bookkeepers: A Breakdown

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Bookkeeping is a riskier job than you might think. That’s why you need to know about E&O insurance for bookkeepers.

A day in the life of a bookkeeper is a busy one. You’re organizing and storing clients’ financial records, cash flow statements, bank reconciliations, loss statements, and all money matters in between. As a bookkeeper, you help businesses (and the occasional cousin, aunt, sister, or sister’s dog) keep their finances in order by managing their accounts and transactions. But, have you ever wondered what might happen if you lost this sensitive information, or if it was taken from you?

While you likely have a handle on those kinds of financial dealings, you might be looking for assistance in your business’s risk management. For instance, you could be curious to know how to properly insure your company to protect your livelihood from the unknown. You may think that the business of bookkeeping simply requires a general business owner’s policy, but in most cases, it’s just not that simple. In fact, Errors & Omissions Insurance for bookkeepers may be even more important.

Lucky for you, we know insurance. And we’ll cover everything you need to know for your business, including why you’ll want to look into purchasing Errors and Omissions coverage. 

What is Errors and Omissions Insurance? 

First, let’s define what an Errors and Omissions Insurance policy is and what it can cover. Also referred to as E&O Insurance or Professional Liability Insurance, these policies can protect bookkeepers from unintentional mistakes or errors. 

The fact that some of what this policy covers is spelled out in its name may help you better wrap your mind around what it is supposed to protect against. 

Bookkeepers may seem superhuman to the mathematically challenged and organizationally adverse, but bookkeepers are in fact just people. And humans make errors. There it is again–that word: errors. 

It’s totally possible that you might make a mistake, forget something or miscommunicate to a client. The unfortunate fact of life though is that any error or omission you make could result in a lawsuit–especially when you’re dealing with people’s money. 

Errors & Omissions policies are put in place to help cover your business in the event of an unplanned mishap. It’s insurance that keeps you and your company protected from civil lawsuits for negligence, common mistakes, omissions and misrepresentation claims.


When it comes to E&O insurance for bookkeepers, though, you’ll need a few more details.

The Benefits of E&O Insurance for Bookkeepers

Errors and Omissions Insurance will help protect your bookkeeping business from a lawsuit made on the claim that mistakes were made by you or your company. Perhaps you lost a client’s financial records in an office move or forgot to file an extension for a mandated tax audit. 

Sure, human error may account for many potential mistakes, but with 58% of US accountants using automation to increase productivity and already 20% of US accounting firms using artificial intelligence, machine-made mistakes are bound to happen too. We’ve all seen iRobot, right?

E&O insurance for bookkeepers would cover the costs that result from legal action incurred by any sort of wrongdoing. 

It’s worth noting that this policy will only cover unintentional errors. Intentionally misleading a client is not something that would be covered. 

Quick Tip: Keep a record of any client agreements, SOWs and transactions made so that you can prove any misunderstanding or mistake was not made on purpose. It’s not a “get out of jail free card”, but also solid security for honest mistakes. 

If you don’t have an E&O insurance for bookkeepers policy in place, you and your company will be liable for whatever settlement cost is determined–not to mention legal fees. Beyond that, you will need to spend time on your defense and can lose opportunities to work with other clients as a result. Plus, as if making a mistake and having to pay for it wasn’t bad enough, not having any support throughout the retribution process can be downright soul crushing. In many cases, E&O insurance for bookkeepers will provide you with legal defense and counsel–and having that help throughout the litigation can make all of the difference. 

Where & How to Get E&O Insurance for Bookkeepers

You can find an Errors and Omissions policy at any credible insurance brokerage. That being said, you may want to start with a company that offers custom insurance plans. This way you can bundle the various policies you need to get the most comprehensive plan. 

For example, Embroker’s policies protect against claims of errors and omissions in your work and they can also protect your personal assets in the event that you become vulnerable to a lawsuit.

The cost of Errors and Omissions Insurance for bookkeepers depends on a number of factors, including your industry, coverage limits, the size of your company and any prior lawsuits. But rest assured knowing that Embroker will find you the best coverage for the best price. 

Other Important Insurance Coverages for Bookkeepers 

E&O insurance for bookkeepers is a must have policy. But, you’ll also want to consider obtaining some of these other kinds of insurance policies too: 

  • Business Owner’s Policy: This type of insurance will include a combination of coverage types including a bundle of general liability and commercial property insurance. 
  • Commercial Auto Insurance: Similar to personal auto insurance, this policy would cover vehicles used for business purposes, including company vehicles in the circumstance where you have various employees who may travel for consultations or sales pitches. 
  • Workers’ Compensation: Another insurance policy you’ll want to have if you run your own bookkeeping business and have multiple employees, Workers’ Compensation insurance will cover care and compensation of individuals on your staff if they get injured while at work in your office space or while traveling for work-related reasons. Honestly, slip-and-falls happen more often than you think.
  • Cyber Liability Insurance: You might also want to consider obtaining cyber liability insurance. As you know, bookkeeping isn’t a stack of papers on the end of a desk anymore. You work with sensitive financial records digitally, and should protect against the potential hacking of this information. 

Embroker’s team of insurance professionals is here to help because we know that navigating your insurance needs isn’t easy or straightforward. And that’s why we work with you from start to finish–and are always just a call or message away.

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