Accountants Professional Indemnity Insurance

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Accountants indemnity insurance is required for all accountants to comply with professional conduct rules and regulations. We provide very competitive insurance for Accountants from the UK’s leading insurers.

Accountants Professional Indemnity Insurance Policy Highlights

Cover complies with:

  • The Chartered Institute of Taxation (CIOT) regulations
  • The Association of Accounting Technicians (AAT) regulations
  • The Institute of Chartered Accountants in England & Wales (ICAEW) regulations
  • The Association of Chartered Certified Accountants (ACCA) regulations
  • The Institute of Chartered Accountants of Scotland (ICAS) regulations

Flexible Professional Indemnity Insurance For All Accountants

Even though Accountancy is one of the more established professions, we know that not all Accountants are the same. With a range of professional bodies and qualifications it can be difficult to establish the correct policy for your needs. We aim to simplify this process. We cover all main professional bodies and can assist with unqualified (but experienced) advisors too.

I’m only a small business, can I get insurance?

Regardless of the size of your business, from sole traders to large corporates, we can assist, either online or with a bespoke quote using our Broker service. We’ve included some useful information below, but if you have any queries please give us a call.

Why do you need Accountants Professional Indemnity Insurance?

Quite simply, this can be to comply with your Professional regulatory requirements. However, it also maintains your professional reputation with your clients and provides invaluable protection should a claim be made against you.

Accountants Professional Indemnity Claims Examples

Failure to lodge tax returns led to client losing tax repayment and interest. Cost £14,000.

Incorrect advice as regards pension payments and alleged concealment of commissions. Cost £675,000.

Lender sought reference for a business’s mortgage. The business failed and the subsequent property sale failed to cover the loan. Cost £180,000.

Two partners were trustees to a family trust. They delegated investment authority to a company that subsequently collapsed. They also failed to minimise tax. Cost £125,000.

The firm, who acted as accountants to a profitable company, introduced them to a tax mitigation consultancy. Schemes of tax mitigation were embarked upon that proved to be fraudulent from a tax perspective. Cost £130,000.

The firm failed to spot a serious fraud due to inadequate audit procedures. The cost exceeded the limit of indemnity of £1,000,000.

Poor investment advice led to serious loss to a trust. Cost £210,000.

The firm acted for the purchaser of a business. There was confusion as to their role. The purchaser thought that the firm was looking at the commercial viability of the acquisition. The firm thought that their instructions were limited to the preparation of cash flow forecasts based on given information for the purpose of raising finance. Cost £180,000.

A partner in the firm stole clients’ money. Cost £625,000.

Failure to realise full value of assets. Cost £110,000

Main Accounting Bodies With Rules

Various Accounting Rules Per Body

Required limit of indemnity 
Two and a half times the firm’s gross fee income for past financial year, subject to a minimum of £50,000 for a sole practitioner or £100,000 in any other case and a maximum of £1,000,000 (of course firms can be recommended to buy much

Maximum excess
Sole practitioners – £30,000 in the aggregate.
Partnerships – £30,000 in the aggregate multiplied by the number of principals.
Corporate practices – £30,000 in the aggregate or the total amount accepted by the principal as a legally binding personal obligation (but not more than £30,000 for any one principal).

Main features of rules
Cover to be provided via an insurer from the ‘List of participating Insurers’ published each year by the Institute. Cover must conform to the Institute ‘approved wording’ – a ‘difference in conditions’ clause must be included where cover differs.

Retroactive cover of 6 years or establishment date of practice must be provided. An ‘Assigned risk pool’ exists for those practices unable to obtain cover.

Run-off cover following cessation must be maintained for 2 years, but it is recommended that run-off is continued for 6 years.

Required limit of indemnity

  • Fee income less/equal to £200,000 – the greater of two and a half times the firm’s total income for past financial year and 25 times largest fee paid in past financial year, subject to a minimum of £50,000.
  • Fee income £200,000-£700,000 – the greater of the aggregate of £300,000 and the firm’s total income for past financial year and 25 times largest fee paid in past financial year.
  • Fee income over £700,000 – the greater of £1,000,000 and 25 times the largest fee paid in past financial year.

Maximum excess

The lesser of 2% of the limit of indemnity in respect of each and every claim or £20,000 per principal.

Main features of rules

  • Cover to be provided by ‘reputable’ (DTI approved) insurers.
  • Cover to be on a ‘civil liability’ basis for each and every claim.
  • Fidelity guarantee cover must be included for partners, directors and employees.
    Run-off cover following cessation of practice must be maintained for 6 years.

Required limit of indemnity

The greater of two and a half times the firm’s gross fee income for its last financial year or 25 times largest fee raised in past financial year subject to a minimum of £100,000 for a sole practitioner or £200,000 in any other case and a maximum of £1,000,000.

Maximum excess

The lower of £20,000 per principal in the aggregate or 2% of the limit of indemnity.

Main features of rules

Cover to be provided by any EU insurers authorised by law. Cover to be for all ‘civil liability’ incurred in connection with the conduct of the business.
Fidelity guarantee cover is ‘recommended’ but not compulsory. Run-off cover following cessation must be maintained for at least 6 years. Firms regulated by certain other professional bodies may be exempt from the CIOT PI requirements.

Usual cover

Limit of Indemnity

Usually the limit of indemnity will be ‘any one claim’ with legal costs in addition. The excess will not normally apply to insurers’ costs and expenses.

Civil Liability

Being on a civil liability basis, unless specifically excluded (which is unusual) cover would include negligence, liability for dishonesty, liability for lost documents, libel and slander, breach of warranty of authority, etc.

Difference in conditions clause

A difference in conditions clause must be present for Chartered Accountants; this is required to demonstrate that the policy offers at least the same cover as the minimum standard required.

Cover operates for all the activities that would be expected of an Accountant, including personal appointments, such as directorships, as liquidator, as trustee, but only in respect of an Accountant’s usual services.

Usual extensions to cover

  • Fidelity.
  • Loss of documents.
  • Costs of representation at tribunals.

Professional Indemnity Proposal Form

We understand that your requirements may not be as simple as the questions asked on our online quote and buy system, therefore we ask that you complete our proposal form and send a completed copy to [email protected]. A member of our team will be in touch with you shortly.