Protecting Accounting Firms From Defamation With Liability Insurance

Posted on: September 16, 2025 by Huntersure

In the accounting world, reputations carry as much weight as balance sheets. A client dispute, a misinterpreted audit opinion, or testimony given during litigation can lead to defamation claims filed against the firm for alleged reputational harm. For small to midsize accountants, accusations can damage credibility and drain resources in legal defense. 

Research shows that accounting-related claims and litigation risk remain real concerns. A 2024 analysis by Cornerstone Research reported over $1 billion in settlements from accounting-related securities class actions. While not all of these cases involve defamation, the trend underscores why insurance agents should ensure clients have protection against the financial and reputational consequences of defamation claims.

3 Red Flags Agents Should Watch For in Accounting Firms

Not all accounting firms carry the same level of exposure. These red flags suggest higher vulnerability to defamation claims:

• Representing high-profile or litigious clients: High-stakes engagements often spark conflict, which can spill into accusations of reputational harm.
• Frequent disputes over reporting accuracy or audit results: If disagreements routinely escalate, the chance of a defamation allegation rises.
• Providing public-facing commentary on sensitive financial matters: Accountants who publish insights or speak publicly face a greater risk of facing claims that their words harmed another party’s reputation.

By recognizing these patterns early, agents can better position their clients for protection.

What Is Professional Liability Insurance for Small to Midsize Accountants?

Professional liability insurance — sometimes called errors and omissions or E&O — steps in when accounting firms face claims tied to errors, omissions, or reputational harm. In the case of defamation, policies defend firms against claims that they made damaging statements about others. Coverage can also include settlements and professional reputation management.

For small firms in particular, this protection can mean the difference between absorbing a manageable claim and facing financial disruption. Coverage helps preserve client trust, too. By addressing allegations before they spiral, accountants show they are both accountable and protected, strengthening credibility in the eyes of their clients and peers.

Huntersure’s Tailored Professional Liability Insurance Program

Huntersure’s program is built specifically for the realities of small and midsize accountants, offering flexible protection for firms with $2.5 million to $25 million in revenue. Agents can highlight several differentiators when presenting this coverage:

• Flexible limits and retentions let agents align coverage with firm size and budget.
• Defamation claim coverage helps mitigate reputational fallout and the costs of defense.
• Reputation management support goes beyond legal fees to help repair client trust.
• Nationwide availability makes the program accessible to diverse firms across industries.

By offering a specialized E&O solution like Huntersure’s program, agents build credibility with accounting firms while expanding their own footprint in this niche market.

Safeguarding Small and Midsize Accountants Against Defamation Claims

Defamation claims can derail even the most careful accounting firms, especially those without deep financial reserves. Professional liability insurance protects against costly lawsuits, helps maintain financial stability, and preserves client confidence. 

With Huntersure’s tailored program, agents can deliver solutions that meet the unique needs of small and midsize accounting firms while strengthening their role as trusted advisors. Contact Huntersure today to bring tailored professional liability solutions to your accounting firm clients.

FAQ About Professional Liability Insurance for Accounting Firms

Does professional liability cover defamation claims brought against accounting firms?

Yes. Professional liability insurance typically covers defamation claims, including legal defense and settlements. Huntersure goes further by offering support for reputation management.

What is not covered under professional liability insurance?

Policies do not cover intentional acts, fraud, criminal activity, or non-professional risks such as bodily injury or property damage. Setting clear expectations with clients about exclusions helps avoid misunderstandings.

Which accounting firms benefit most from this program?

Huntersure’s professional liability program is designed for small to midsize accounting firms with $2.5 million to $25 million in revenue. The program is available nationwide and serves firms across a wide range of industries.

About Huntersure

Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding, and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.

Posted in: Accountant Professional Liability Accountants Accounting

Tagged: small to midsize accountants