Accountants Insurance | PI Requirements, Costs, Quotes

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.

How much does accountants insurance cost?

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 package from Hiscox, you can combine several property-focused covers. Start with business contents bet gambling bonus codes 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.

12.6 The cost picture

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. 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.

5. ICAS — the Scotland position

If any points are unclear, you should clarify these points with your broker. Professional indemnity insurance operates on a 'claims made' basis which means that it is the policy in force when the claim is made that responds, not the policy in force at the time when the work leading to the claim was carried out (unless the two happen to be the same). The retroactive date within the policy is the date which determines how far back in time the insurer will respond to claims arising from past work. This is different from the renewal date which is the date of the policy inception or renewal, referring to the date when the insurance cover goes into effect. In simple terms, this means if there's a period when a business allows their professional indemnity insurance to expire, any new claims arising will be uninsured regardless of when the work was carried out.

A costly miscalculation

It's very important that the retroactive date is carefully managed as part of the policy renewal or inception. The Institute of Chartered Accountants and the ACCA have specific and strictly enforced rules which dictate the levels of cover their members must carry. Full details of the requirements can be found on their websites or by talking to a specialist broker. Taxation covers a wide area of work and is the number one cause of all professional indemnity claims against accountants. An estimated 70% of all claims relate to tax issues. 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.

12. Audit-specific PI considerations

The list below gives an indication of where the majority of accountants professional indemnity claims come from: Low-risk - General accountancy work, personal tax returns, bookkeeping Medium-risk - Insolvency, company tax, payroll, audit High-risk - Corporate finance, financial advice, trusts, wills, tax schemes, mergers, acquisitions Probate has traditionally been a major cause of professional negligence claims against the legal profession and specialist advice should be sought by accountants who are now undertaking or who are considering adding probate to their range of services. The Assigned Risks Pool (ARP) is a facility put in place by the Institute of Chartered Accountants to provide temporary cover for their members' firms who are unable to secure professional indemnity insurance in the open market. There could be a variety of reasons why a firm is unable to obtain PI insurance. It will normally be because they have become a 'distressed risk' due to claims problems and no insurance company wants to insure them. We assist accountancy firms who have found it necessary to enter the ARP and are now looking to return to find professional indemnity insurance in the open market.

How many PI insurers are there?

Trading without adequate professional indemnity insurance is a serious breach of regulatory requirements as well as poor business practice. A firm will be prevented from trading and closed down if they cannot obtain adequate cover. This guidance note is intended for information purposes only. Whilst all care has been taken to ensure the accuracy at the time of writing, it is not a reliable substitute for specific insurance advice. For advice about this topic, please contact us or your current brokers. 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.

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This guidance note shall not be reproduced in any form without our prior permission. Professional indemnity insurance (PII) covers accountants against claims of professional negligence, errors in advice, or failures that cause a client financial loss. It is a mandatory requirement for all practising members of ICAEW, bet new customer free bet offers ACCA, AAT, and most other professional bodies. Most sole practitioners pay between £200 and £800 per year. Claims arising from negligent advice or services Errors or omissions in accounts, tax returns, or financial statements Breach of confidentiality or data protection failures (often with limits) Legal defence costs if a claim is made against you Court awards and settlements up to your policy limit PII does not typically cover deliberate wrongdoing, criminal acts, or general business liabilities (for which you would need public liability insurance separately).

6.4 Run-off

Your professional body may set a minimum indemnity level. Check your body's practising regulations before choosing a policy. Specialist professional indemnity insurers for accountants include: PolicyBee (online quotes, good for sole practitioners) ICAEW and ACCA both operate preferred supplier schemes that can offer competitive rates for members. Services offered (audit, investment advice, and insolvency carry higher risk) Claims history (previous claims significantly increase premiums) Client profile (high-value clients or complex work costs more to insure) Most PII for accountants is written on a "claims-made" basis, meaning the policy in force when the claim is made covers it, not the policy in force when the work was done. This means you should maintain continuous cover and run-off cover when you close your practice. Likewise, if your cashflow forecasts turn out to be incorrect and a client sues, insurance can help with the aftermath. Our professional indemnity insurance can also be suitable for tax accountants and 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. However, public liability insurance might be more relevant to businesses with frequent client interactions. 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.

• Consideration for higher limits based on client contracts or sectors
• Joint audits may require specific provisions in the PI policy
• Insured must disclose all material facts to the insurer
• Retroactive date is a critical policy feature to review
• Notification of circumstances clauses must be adhered to strictly

The two main bodies for chartered accountants are ACCA and ICAEW.

PII minimum approved policy wording

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.

How much does it cost?

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. ACCA (external link) is a global organisation for professional accountants.

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.

• Minimum indemnity limit typically £50,000 for members in practice
• Cover must be provided by an insurer authorized in the UK
• Policy must cover civil liability from professional business activities
• Run-off cover required upon retirement or cessation of practice

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.