We're here to help
0345 561 0320
Mon-Fri, 9am-5pm, local rate & mobile friendly
Even small mistakes cause big problems. Protect your work, your reputation and your bank balance with professional insurance for professional people.
Quote online in less than 2 minutes
Professional indemnity insurance defends you against claims of negligence, breach of confidentiality, dishonesty, libel and slander. We offer up to £5,000,000 cover.
Your clients expect the utmost care and attention. That’s perfectly understandable when it’s their money in your hands.
But what happens if you make a mistake? The kind that can cost you time, money and your reputation?
Accountants’ insurance saves all three. It’s also a must-have if you belong to ACCA, AAT, ICAEW, ICAS or CIMA. Scroll down to find out exactly what you need.
If you’re not chartered, you don’t strictly need accountants’ insurance. If you’re licensed to practise accountancy by ACCA, AAT, ICAEW, ICAS or CIMA, then you do.
But as ever, there’s a big difference between what’s needed and what’s best for your business.
Everyone’s capable of making an error, so it makes good sense to have professional indemnity insurance for accountants. It protects you if a client claims your work doesn’t add up and pays your legal expenses as well as any damages.
Oh, and if you have employees, you’ll need employer’s liability insurance too. It’s the law.
Professional indemnity (PI) insurance is mandatory for all ACCA accountants with a certificate to practise.
Your ACCA insurance must also provide a minimum level of cover, which is proportional to your income and works out like this:
Annual income less than £600,000: whichever is greater – 2.5 times your total income or £100,000.
Annual income over £600,000: £1.5 million.
If you’re in partnership, have fellow directors, or employ full-time or part-time staff, ACCA wants you to have Fidelity Guarantee Insurance (FGI) - with £100,000 as the minimum level of cover. FGI covers you for theft by your employees and should include your sub-contractors too.
If you cease trading, ACCA says you need at least six years’ worth of run-off cover. It takes care of any claims that could arise from work you did before you closed your business. It’s a good thing, considering problems can take months or even years to emerge.
If you practise accountancy or bookkeeping under an AAT licence, you need professional (PI) indemnity insurance.
Your AAT insurance must work on an ‘any one claim’ basis, which means each claim is treated separately. So, if your level of cover is £100,000, your insurer will pay compensation up to that amount for each claim, as well as up to £100,000 in legal costs.
You also need a minimum level of cover according to your type of business and income, which the AAT specifies like this:
Sole traders: whichever is greater – £50,000 or 2.5 times the firm’s gross fee income.
Partnerships and limited companies: whichever is greater – £100,000 or 2.5 times the firm’s gross fee income.
Anyone with a gross fee income over £400,000: £1 million worth of cover.
The other proviso is that your AAT insurance must be ‘retroactive’, to cover work you did in the past. That’s because PI works on a ‘claims made’ basis. It means for a claim to be valid, your policy needs to be up and running both when the work was done and when a claim is made.
If you’re a member of the ICAEW with a practising certificate and engage in public practice, professional indemnity (PI) insurance is essential.
If you’re unsure if your business activities are considered public practice, read the ICAEW’s definition of public practice.
The ICAEW says your PI policy must be with an insurer from its approved list – although rest assured that the insurers we use are on there, guaranteeing you the cover you need.
It also sets minimum levels of PI cover, which are for ‘any one claim’, based on your business’s total yearly income:
Annual income over £800,000: £2 million.
Annual income less than £800,000: 2.5 times your gross fee income and not less than £250,000.
However, the ICAEW warns members to think carefully about opting for less than £2 million worth of cover and potentially leaving themselves exposed.
There are further minimum ICAEW insurance cover requirements for licensed firms, those authorised by the FCA to conduct insurance distribution activities, and accredited probate firms. You can find them here (under regulations 3.4-3.5).
Your PI must include at least six years’ retroactive cover to cover your past work. This is usually free to add to your policy. If you’ve been trading for less than six years, backdate cover to the date you started your business.
The final requirement of ICAEW insurance is two years’ run-off cover if your business closes its doors. This ensures you’re covered if you face a claim for work you did before you ceased trading. It’s a good thing, considering problems can take months or even years to emerge.
ICAS says its practising certificate holders must have professional indemnity (PI) insurance, and it also specifies how much.
The required minimum levels of PI cover are for ‘any one claim’ and are based on your business’s total yearly income:
Annual income over £800,000: £2 million.
Annual income less than £800,000: 2.5 times your gross fee income and not less than £250,000.
There are further minimum ICAS insurance cover stipulations for licensed firms and those authorised by the FCA to conduct insurance distribution activities. You can find them here.
ICAS also wants your policy to be with an insurer from its approved list – although rest assured that the insurers we use are on there, guaranteeing you the cover you need.
The final requirement for ICAS insurance is for at least two years’ worth of run-off cover if your company stops trading. This takes care of claims relating to work you did before your business closed its doors. It’s a good thing, considering problems can take months or even years to emerge.
Here’s what CIMA has to say about professional indemnity (PI) insurance: ‘As a CIMA Member in Practice (MiP) you must have professional indemnity insurance. Not only is it a mandatory requirement, it is also in your interests and that of your business to have appropriate levels of professional indemnity insurance.’
It doesn’t specify how much PI cover you should get, but it does suggest speaking to a broker for advice. In our experience, that’s a very good idea.
We usually recommend buying as much PI cover as you can afford, but at least 2.5 times your annual fee income. There’s more about pinpointing the best level of CIMA insurance for your business here.
CIMA also advises members to consider run-off cover. If you close your business, it covers claims concerning work you did before you stopped trading. It provides an essential security blanket since problems and claims can take many months or even years to emerge.
Accountants’ public liability (PL) insurance covers physical damage rather than financial losses. It’s useful if you go out and about seeing clients, or if clients come to see you.
If someone claims you caused harm to their person or property, PL covers legal costs and any compensation. It takes care of a whole range of trips, slips, falls and other unpredictable accidents.
If you have staff, including part-time employees, trainees and work experience kids, then you’re required to have employers’ liability (EL) insurance by law. It pays legal expenses and compensation if staff claim they were injured or made ill by their work.
Without it, the Health & Safety Executive can fine you £2,500 for each day you were meant to have EL but didn’t. And there’s another £1,000 fine to pay for not displaying the correct certificate.
Cyber insurance provides an immediate plan of action if you’re the victim of cybercrime. It includes IT rescue, compensation for lost revenue, and covers third-party claims if hackers steal confidential data and personal information.
It’s a good idea to protect your kit too. Contents insurance is for all your office equipment and pays for repair or replacement of things like computers and furniture. Portable equipment insurance covers all the bits and pieces you take around with you, like laptops and phones.
It's a simple formula, really. From day one, we’ve focused on doing insurance better.
For our customers, that means:
Plus, there’s more. We give you free stuff, too. Like an “I’m insured” badge for your website. And a reward each time you recommend us.
You'll get access to our online article hub packed full of helpful tips and insurance-savvy advice.
And if you're still on the fence, check out our platinum-rated customer feedback. We think it speaks volumes about how we do things round here.
Call us and a real person answers. No call centre, no phone menu, no scripts. Just friendly, helpful advice from a business insurance professional.
