However, public liability insurance might be more relevant to businesses with frequent client interactions.
The regulatory backdrop — what ICAEW, ACCA and AAT require
Professional indemnity insurance is compulsory for members of accounting organisations like ACCA and ICAEW. PI cover can help to protect you against the cost of legal action if a client claims they lost money or suffered reputational damage as a result of your work, professional services or advice. Whether you’re settling or defending a claim, you can addlegal fee protection when you take out this insurance, too.Furthermore, in some circumstances, professional indemnity insurance for chartered accountantscan be mandatory. Each business is unique – some accountants may also choose to have public liability insurance. These are just some of the types of business insurance for accountants that we can offer. The organisations that facilitate the training and qualification of chartered accountants in the UK and globally will set the rules for their members’ professional indemnity requirements, and this will often include minimum limits for members to have in place for their business. The two main bodies for chartered accountants are ACCA and ICAEW. ACCA (external link) is a global organisation for professional accountants.
- Public Liability insurance is not a legal minimum but is often required for contracts and leases.
- Professional Indemnity insurance is a legal requirement for certain professions like financial advisors.
- Motor insurance is a legal minimum for any company vehicles, with at least third-party cover.
- Product Liability insurance may be required if you manufacture, supply, or repair goods.
- Directors' and Officers' Liability insurance is not legally required but is critical for risk management.
To become a member of the organisation and an ACCA chartered accountant, you must take and pass the ACCA Qualification. As a member, you are required to have professional indemnity insurance.
Frequently asked questions
Our professional indemnity insurance can also be suitable for tax accountants and bet welcome bonus betting sites no deposit company registrars as well as auditing and payroll professionals. This means a wide range of industry activities, from filing to invoicing, are covered. Every business entity is liable to members of the public for injuries or property damage that might occur because of its activities. Public liability insurance is designed to help absorb the cost of such cases. Many businesses can face public liability claims, even if they aren’t public-facing – for instance, an office sign could fall from a commercial building. The ICAEW (external link) is the only body in the UK that publishes minimum terms for the Professional Indemnity coverage it requires its chartered members to have.
- For office-based businesses, minimum often includes EL, Public Liability, and contents insurance.
- For construction contractors, minimum typically includes EL, Public Liability, and Contract Works insurance.
- For consultants, minimum often includes Professional Indemnity and Public Liability insurance.
- For retail businesses, minimum includes EL, Public Liability, and Product Liability insurance.
- For hospitality, minimum includes EL, Public Liability, and Employers' Liability.
Hiscox has a Chartered Accountant policy wording that meets all the ICAEW minimum terms requirements.
Which Firms Provide PII Insurance for Accountants?
If you file accounts with HM Revenue and Customs and a miscalculation means thousands of pounds aren’t accounted for, your client could find themselves facing a larger-than-expected tax bill. If this happens, they may blame you and take legal action to reclaim the lost money. For an accountant, Hiscox business cover can be tailored to include professional indemnity insurance, which helps with the cost of defending and settling the case. It’s welcome protection, whether your accountancy firm makes a mistake or faces false accusations. Your accountancy practice’s office is kitted out with the latest laptops and touchscreen monitors as well as audio and camera equipment for remote calls with clients.
Get accountant professional indemnity insurance quotes.
When a gang of thieves break-in to the offices overnight and make off with the tech, you’re left struggling to service your clients. Business contents insurance can help to pay for replacement items so you can get back up and running. Accountants who join industry organisations such as the ICAEW or ACCA are required to have a certain level of professional indemnity cover to meet each organisation’s membership rules. At Hiscox, we offer cover levels that meet the minimum requirements of such bodies. As you gain more professional qualifications and industry expertise, you may offer additional services. Other professional bodies that ask for their members to have PI cover include: Hiscox accountants’ insurance is comprehensive and flexible, so you can tailor the cover to meet the requirements of your professional body. “With 20 years in the industry, I am a professional indemnity insurance specialist.
| Policy Feature | Requirement | Purpose / Rationale |
|---|---|---|
| Run-off Cover | Minimum 6 years post-termination | Covers claims arising from work done while insured |
| Breach of Confidentiality | Must be included | Protects against inadvertent data disclosure |
| Loss of Documents | Must be included | Covers costs of replacing or restoring documents |
| Libel and Slander | Must be included | Protects against defamation claims |
| Fidelity Guarantee | Optional but recommended | Covers client money dishonesty by employees |
I champion keeping our policy wordings as ‘plain English’ as possible and stamping out unnecessary jargon.
| Practice Size (by staff) | Minimum Limit per Occurrence | Aggregate Limit | Typical Annual Premium Range (GBP) |
|---|---|---|---|
| Sole Practitioner | GBP 2,000,000 | GBP 5,000,000 | 250 - 500 |
| 2-5 Staff | GBP 5,000,000 | GBP 10,000,000 | 500 - 1,200 |
| 6-20 Staff | GBP 10,000,000 | GBP 20,000,000 | 1,200 - 3,000 |
| 21+ Staff | Case-by-case assessment | Case-by-case assessment | 3,000+ |
Clarity is key when talking to customers about their professional indemnity cover.” - Liam Barry, PI Underwriting Manager (Emerging and Traditional) Understand why this cover is necessary and what protection it provides Having worked as a professional indemnity insurance broker for many years, I know there is one very important part of insurance cover that many clients are unfamiliar with – run-off insurance. Run-off insurance is professional indemnity insurance cover provided for the past liabilities of a business once it has ceased trading. This is to protect both the business and its clients from financial losses suffered as a result of professional negligence.
PII frequently asked questions
If all partners/directors are qualified to undertake probate activities and if the probate work represents less than 20% of the total income of the firm, the practice can usually extend its current professional indemnity policy to cover this diversification. However, if the probate work represents a more significant percentage of the total income and/or is undertaken by only a limited number of qualified individuals in the firm, then businesses often form a separate limited company to carry out the probate work. In most cases we are able to cover this additional company under the existing professional indemnity policy. Consideration must be given to the requisite limit of indemnity for the probate work. ACCA regulations require a minimum of £100,000 for any one claim limit of indemnity.
4.1 The ACCA sliding scale
Anyone engaged in probate activities must also assess the maximum exposure of any single client and/or estate so insuring that the limit of indemnity is adequate in the event of negligent advice or failure to act. Lockton is on hand to discuss the parameters of cover and the appropriateness of the limit of indemnity for your business – call Lockton Companies on 0117 906 5057, email accountants@uk.lockton.com or visit Lockton’s website for more information. We offer specialist advice for your business. Our PI insurance experts have a wealth of experience, and work with a wide range of insurers to find you the right cover on competitive terms. PI insurance provides you with protection should your client claim they have suffered financial loss as a result of your professional negligence, which could involve: Breach of a professional duty of care. Many regulated professionals are required to obtain run-off insurance and maintain cover for a minimum period as specified by their regulatory body. For professionals like accountants, who are regulated, run-off cover is mandatory and ACCA requires their members have a minimum of six years’ cover.
- Minimum cover for Public Liability in many service contracts often starts at £1 million.
- Professional Indemnity minimums for accountants and auditors are often set by their professional institutes.
- Cyber insurance minimums in IT contracts are becoming standardized, often requiring £1-5 million cover.
- Product Liability cover of £2-5 million is a common minimum for manufacturers supplying large retailers.
Professional indemnity insurance policies operate on a ‘claims made’ basis – this means that for the policy to respond there needs to be cover in place at the time the claim is made, rather than when the negligence occurred. So, for example, if a client makes a claim against you tomorrow for alleged negligent advice given in 2015, then it will be the policy you currently have in place which will respond to the claim.
How are claims from former clients treated?
We can provide other specific types of cover and build them into a policy that’s tailored to the exact needs of your business. Hiscox professional indemnity insurance is relevant to many complaints an accountant can face. It can help to cover allegations of negligence, accidental breach of confidence and giving poor business advice. Should you provide good-faith tax guidance which turns out to be misplaced, we may help to pay related legal fees and compensation. Likewise, if your cashflow forecasts turn out to be incorrect and a client sues, insurance can help with the aftermath. It is therefore important not only to maintain cover but to also maintain an adequate level of cover once you have ceased trading.
Should I notify a circumstance even if no claim has been made?
Thankfully, your Hiscox policy can grow with you – we also offer a policy wording that is compliant with the ICAEW minimum terms for Chartered Accountants. With an office insurance bet best bookmaker offers uk package from Hiscox, you can combine several property-focused covers. Start with business contents insurance to protect your offices against damage caused by flood or fire or from losses incurred after a break-in. Add portable equipment insurance to protect items like laptops and smartphones when used away from your offices. And, if you own the building, commercial property (buildings) insurance can cover the bricks and mortar.
Key takeaways
Note: to add any of the other covers you must first take out business contents insurance. Employers’ liability insurance can offerprotection against claims made against you by employees who have had an accident or fallen ill as a result of their work. For example, if one of your accountants claims you’vefailed to support them with work-related stress. Note that employers’ liability insurance can be required by law (external link) for any business that employs others. You can be fined up to £2,500 for every day you are not covered. The time limit for professional negligence claims is outlined in the Limitation Act 1980.
What's covered by professional indemnity insurance for Accountants
Your PI insurance policy should provide adequate cover for the services your accountancy business offers and the unique risks you face. Civil liability (such as damages and costs) for breach of duty. Legal fees and expenses in defending a claim. Helplines to provide guidance bet betting websites with welcome bonus no deposit on managing risks. Our dedicated team of PI insurance experts is focused on providing a high standard of service to the professional services sector.
7.1 The ATT minimum
Working with Marsh Commercial provides you with additional benefits such as: An in-house team of specialist claims handlers. Free 24-hour legal and counselling advice helplines. Free tax advice helpline for you and on behalf of your clients. As part of Marsh, global leader in insurance broking and risk management, we have the ability to evolve your cover as your business grows. We support a full range of accountancy clients including those engaging in more complex activities, such as: Policy exclusions and restrictions may exist based on your unique requirements.