ACCA Members Professional Indemnity Insurance

You should always think about your previous work and consider whether your insurance is still enough to pick up any claims that could arise from it. Most claims come from jobs and contracts you’ve already completed and they’ll be subject to the level of cover you have now, not what you had when the work was done. We can’t give a recommended level of professional indemnity insurance in this blog. As you’ve seen, it depends on your individual circumstances. We know how confusing getting the right PI insurance can be, though.

Importance of run-off cover

We do that by making you think about these things: what you do, who you do it for, and what it's worth. Your answers help build a picture of your business's risks – the things that could go wrong and ultimately lead to a claim against you. And that, in turn, helps determine the level of PI cover you need. Figuring out how much professional indemnity insurance you need can be a little confusing. There’s lots to consider but don’t overcomplicate it.

3.3 Aggregate cover and reinstatements

Take it step-by-step using our list below: What do your clients ask you to do for them? Worst-case scenario, how much will it cost to put right? Also, how much business do you do? If your turnover is relatively high, you've either got lots of clients or fewer, high-value clients. Either way, claims are more likely and/or will be for more money.

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Your professional indemnity insurance needs to cover the total cost of correcting your mistakes and the legal costs of a claim against you. For example, a client sues you and the total bill to fix your error, compensate them, and pay each party's legal expenses comes to, say, £300,000. If your level of cover is only £250,000 you’re faced with meeting the £50,000 shortfall yourself. Are your clients small businesses or large multinationals? Are they in 'rich' industries like banking, finance, or IT? We’re here to answer any questions you have and guide you towards the cover that’s right for you.

What insurance is available for accountants?

For accountants, surveyors, and many other professionals, it’s a necessity. If you’re a member of a professional body, like the ACCA for accountants or RICS for surveyors, you’ll need to maintain a minimum level of of professional indemnity insurance cover to qualify as a member. The requirements are different for every professional body. You might also be legally required to have professional indemnity insurance if you land a big contract. Especially if it’s in the public sector.

3.2 Excess limits

This gives your client peace of mind that any problems won’t leave them out of pocket. Professional indemnity (PI) insurance protects you against allegations of negligence and the legal costs of defending you, regardless of the claim's validity. That's important because even if you're 100% sure you didn't mess up, it doesn't bet top betting sites uk free mean clients or third parties can’t claim you did. And if that happens, doing nothing about it isn't an option. Getting a solicitor to help won't be cheap.

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The cost of your defence could easily run into many £tens (or even hundreds) of thousands if the claim is complicated or protracted. In fact, in many claims, the legal costs are larger than the amount that’s claimed for. So make sure you choose enough cover to pay a claim's potential legal costs. The type of professional indemnity policy you go for is almost as important as its level of cover. In the aggregateIf you buy a policy with, say, £250,000 cover 'in the aggregate', that's the maximum amount the policy will pay for the accumulated total of all claims made against you in one policy period. Just give us a call on 0345 222 5391 and we'll be happy to help. In the meantime, remember that budgeting for insurance (at whatever level of cover) is always going to be easier – and cheaper – than budgeting for a disaster. And that's why we advise you to buy the highest level of cover you can afford. Rated 4.7 out of 5 stars on Reviews.co.uk Over 300,000 quotes completed per month The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices.

• Insurance policies must be reviewed annually to ensure they meet updated legal minimums.
• Notify your insurer immediately if your business activities change to avoid invalidating cover.
• Keep all insurance certificates and policy documents accessible for inspection by authorities.
• Use a broker specializing in your industry to navigate complex minimum requirement landscapes.

Since accountants give professional advice and service related to their clients' finances, professional indemnity insurance can help protect an accountant. And what other insurance will an accountant need?

How much does accountants insurance cost?

AKA 'risky' areas that cost insurers lots to fix. So it’s really important you read your policy wording carefully and speak to your insurer (or a broker like us) if you think you need more cover. A word of warning about reducing your level of cover. We're sometimes asked about this by customers who've been working on high-value contracts that have come to an end. The thing about reducing your level of cover is that it changes your policy retrospectively too. Below we'll discuss these questions and more, as each business's needs differ depending on the type of work done and if clients are seen in person or there are employees or business property to protect.

Here's all you need to know to find the best insurance for your accountancy business.

Run-off cover — easy to ignore, expensive to forget

Are they by-the-book or more laid back? As a consultant or contractor, you’re up against it. Big companies won’t hesitate to unleash the might of their legal department or corporate lawyers if they think there’s a reason to claim. And if they do claim, they won’t go easy. If you find yourself on the receiving end of an expensive-looking lawsuit, your policy needs enough weight to cover all the potential costs of defending you and compensating your client.

Contents Insurance for Accountants

What are your average and largest fees? What’s a typical total project value? Is your client expecting either a revenue boost or a cost saving as a result of your work? Don’t assume you can only be sued for the amount your client pays you. To some extent, you can limit your liability by contract, sure.

4.6 Disclosure obligations

But if things go wrong and a court decides you’re liable for more, you’ll have to pay it. If your work is part of a larger project and your client alleges your mistake is responsible for delaying or disrupting it, they’ll sue you for their total loss. Bear in mind many projects, particularly those in architectural work or involving large-scale IT changes, can cost many £millions. You don’t want a bill like that through your door. There are many industries for whom PI insurance isn’t optional. How much PII does an accountant need? Where can I get accountant insurance quotes? Which companies sell PII insurance to accountants? As with any occupation giving professional advice or service to clients, accountants may be obligated to buy professional indemnity insurance (PII). In fact, professional indemnity insurance is required for membership to the main UK accountancy bodies.

Structured data

Cyber claims come in all shapes and sizes ranging from the inconvenient to the catastrophic and are just as likely to impact sole traders as global firms – the difference being global firms have well-resourced defences. A recent case we have seen involved a small accountancy firm where an infected spreadsheet attached to an email contained malicious software called a 'keylogger' which enabled the criminals to watch every keystroke, giving them important information including passwords for online banking and other websites. The breach was quickly spotted but the incident ended up costing £180,000. For a small organisation, that's any organisation with fewer than 50 employees, a small breach tends to come in at between £10,000- £30,000. A large breach for a small organisation tends to come in at between £60,000 and £80,000, but there have been some huge cases recently.

What work is considered high risk?

Some of the most expensive breaches recently have involved ransomware. The free cyber insurance included in Cyber Essentials would usually cover the costs for a small breach and certainly cover the essential emergency assistance for a breach. A large breach can cost astronomical amounts as we've just discussed. Any company can upgrade their insurance cover to higher limits of indemnity. We will always take into account that they have got Cyber Essentials so they get preferential rates because Cyber Essentials is shown to reduce the risk by at least 80%.

16.4 The trade-off between limit and excess

A question customers often ask us is: 'How much professional indemnity insurance do I need?' And what we usually advise them is: as much as you can afford. But bear with us because there’s method in our vagueness. The problem we have is that there isn't a one-size-fits-all rule. That makes it difficult for us to say precisely how much professional indemnity (PI) insurance is enough. So we get you to tell us instead. Even when not required due to an exemption, accountants may prefer to have PII for protection.

How much PI should I actually buy above the minimum?

If you were unlucky enough to have, say, three claims against you and their combined costs are more than £250,000 then you’d be a bit stuck. Any one claimIf, on the other hand, you bought £250,000 cover for ‘any one claim’ then you're covered for unlimited claims, up to a maximum of £250,000 for each one. Though you'd still need to be careful and check if there’s an inner limit (or ‘sub-limit’) attached to your policy. As that could limit how much your insurer pays out for certain categories of claims. When it comes to PI, inner limits are usually placed on things like intellectual property disputes and claims involving lost documents which need to be restored. Plus there are other types of business insurance accountants might need or want.

• 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.

If you work for a large accountancy firm you shouldn't need to buy these coverages yourself, but you would need to buy the cover you want if you run your own accountancy business. For example, if you have any staff you're probably required by law to have a valid employers' liability insurance policy, if you see clients in person you may want public liability insurance and expensive computer equipment can be protected with business contents insurance.

• When hiring subcontractors, ensure they hold their own EL insurance to avoid liability transferring to you.
• For joint ventures, a project-specific insurance package meeting all parties' minimums is often required.
• When working overseas, local statutory insurance minimums must be met, which can differ significantly.
• For mergers and acquisitions, due diligence must verify all target company insurance meets legal minimums.
• Temporary event insurance must meet local authority requirements for public safety and liability.

And any accountant, whether independent or working for a large firm, may even need to make changes to their personal car insurance if they visit clients or risk driving uninsured.

Below we explain each type of accountant insurance in more detail, answer FAQs and show sample quotes to give you an idea of insurance costs for an accountant.

• Check if your business needs Professional Indemnity insurance as mandated by your professional body.
• Review client contracts, as they often specify minimum insurance levels for Public Liability.
• Assess the value of assets and potential business interruption to determine adequate property insurance.
• Consider Cyber Liability insurance, increasingly required in contracts for handling client data.