ACCA Members Professional Indemnity Insurance

I'm retiring and selling my practice — does the buyer's PI cover my prior work? Only if the buyer's PI is structured to take over prior-acts liability, which is a specific clause that must be negotiated. The default is that you continue to need run-off cover.

Paul Gillett

Fee Protection pays the professional fees of running an HMRC enquiry. PI pays damages where the practitioner's work was negligent. They are complementary; neither replaces the other. Modern PI usually covers the liability arising from a cyber-driven failure of professional services. It does not typically cover ransom, system rebuild, business interruption or notification costs — those need a standalone cyber policy. Sale price negotiations should include who funds the run-off. Author: Apex Insurance Brokers Ltd — written by the Apex commercial broking team.

How much does accountants insurance cost?

Can I place PI outside the ICAEW Participating Insurer list? Cheaper non-participating quotes are typically not a permitted alternative under ICAEW PII Regulations. What happens if my PI insurer fails? PI policies written by UK-authorised insurers benefit from FSCS protection (currently 90% of the claim without limit for bet best betting promos for new users compulsory insurance, and 90% of claim without limit for PI for individuals and small businesses for professional indemnity claims). Always confirm FSCS eligibility for your specific cover. Read more on the Apex team page.

• Financial penalty for non-compliance can be up to £5,000
• Suspension of membership is a potential consequence
• ACCA's Professional Standards Department monitors compliance
• Members must notify ACCA of any material change in cover
• Breach of requirement is considered misconduct

About Apex Insurance Brokers Ltd Apex Insurance Brokers Ltd is a UK commercial insurance broker based in Bristol, specialising in Professional Indemnity for accountants, solicitors, surveyors and the wider professional-services sector.

Why Professional Indemnity Insurance Matters for Accountants

Does R&D advisory get treated differently? Underwriters now scrutinise R&D advisory specifically, often impose sub-limits, exclude contingent-fee work, or rate it heavily. Disclose accurately at renewal — non-disclosure voids the cover for an R&D claim. No — fines and penalties imposed on the firm are uninsurable as a matter of UK public policy. FRC defence costs and investigation costs are typically insurable, and these are often the larger figure.

What should I know if I decide to move from my existing PI insurer?

What is a Liability bet free money to bet when you sign up Limitation Agreement (LLA)? An LLA is permitted under s.534-538 of the Companies Act 2006 and allows an audit client and auditor to agree a cap on auditor liability for one financial year. It must be shareholder-approved, "fair and reasonable" and disclosed. Common on private audits, rare on listed. Do I need both Fee Protection (Tax Investigation) Insurance and PI? We are authorised and regulated by the Financial Conduct Authority — FRN 724952. Registered in England and Wales — Companies House 07014570. Registered office: details available on our About page. Always read it alongside the current published rules of your accountancy body and your individual policy wording. Professional Indemnity placement should be undertaken with a broker authorised under the FCA's Insurance Distribution rules. The next scheduled review is November 2026. Apex Insurance Brokers Ltd.

Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House number 07014570.

• Proof of insurance must be submitted annually to ACCA
• Failure to maintain insurance can lead to disciplinary action
• ACCA may request a certificate of insurance at any time
• The policy must be in the name of the firm or sole practitioner
• Cover must be continuous with no gaps

This guide is technical reference material, not regulated advice. The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement.

What if You're Not Chartered?

This is a specific clause that has to be requested; it does not happen automatically. The choice between a body-sponsored group scheme (ACCA, ICPA, AAT schemes) and open-market placement turns on: Premium: schemes are sometimes cheaper at the smallest tier; open-market is usually cheaper above £100k of fees. Cover: schemes have standard bet best uk gambling sites 2026 wordings; open-market can be tailored. Service: scheme claims handling is volume-driven; open-market with a broker offers a more bespoke claims experience. Renewal stability: schemes' rates can shift sharply if the underlying scheme insurer pulls back.

Strategic Professional

A minimum-premium floor of £500–£900 dominates the smallest end of the market. Sole-practitioner premium is shaped by minimums, channel costs and first-year unknowns. Run-off should be budgeted for at 1.5–3× last live premium. What is the absolute minimum PI cover I must hold as a UK accountant? ICAEW and ICAS set 2.5 × gross fee income or £1.5m, whichever is the lower (capped at £3m on the formula); ACCA uses a banded scale starting at £100k for the smallest practices; CIOT, ATT and IFA use a similar £100k–£1m structure; AAT licensed members start at £50k.

5.2 Excess

A multi-bodied firm complies with the highest applicable standard. Is PI cover legally compulsory or only regulatory? PI is regulatory, not statutory, for most accountants. Audit firms hold PI under the audit registration rules; the FCA can mandate PI for firms with regulated activity. The practical effect is the same — without PI, the practitioner cannot lawfully hold a practising certificate. The amount of insurance an accountant needs depends on whether or not they're a chartered accountant, with which professional body they hold membership and how much they collect in fees. Let's look at how these factors affect the limit of professional indemnity insurance (PII) an accountant needs. Rated 4.7 out of 5 stars on Reviews.co.uk Chartered accountants must have a professional indemnity insurance (PII) policy, and this policy must meet certain requirements.

How to Calculate What Level of Professional Indemnity Insurance You Need

The market does not work that way. Every PI insurer carries a fixed cost to issue and service a policy: underwriting time, broker commission, regulatory levies (IPT, FSCS levies amortised), claims-handling reserves. That fixed cost translates into a minimum premium below which the insurer cannot profitably write the business. In the current UK market the practical minimum premium for accountants' PI sits in the £500 – £900 range, depending on insurer, channel and renewal cycle. A new sole practitioner with £15,000 of first-year fees and £50,000 of cover is paying not for the risk — which is statistically tiny — but for the floor cost of having a policy at all.

What work is considered high risk?

Two further dynamics inflate the small-practice cost: A practice in its first year of trading has no claims history, no track record on file quality, and the underwriter is pricing for an information gap. Sole practitioners are typically placed via aggregator channels or member schemes that carry higher distribution costs than a directly broked mid-market account. A second-year renewal, with a clean first year and an established broker relationship, will usually see a 10–25% reduction or — at worst — a flat outcome. Sole practitioners are sometimes tempted to push the excess up to reduce premium. A move from £1,000 to £2,500 excess on a £1,500 premium might save £150 of premium against a £1,500 additional self-insurance.

Your instructions to us

The break-even is many years of claim-free trading. The same logic does not hold for larger firms where the excess movement is in absolute terms larger and the premium saving more meaningful. Run-off is sometimes priced as a single up-front premium (typically 150% to 300% of the last live annual premium for the full six years) or paid annually. A sole practitioner retiring should budget for: a one-off run-off premium of £3,500 – £15,000 depending on practice profile; or six annual payments averaging 60–80% of the live premium. Watch out: if the practitioner sells goodwill rather than ceases, the run-off may transfer to the acquirer's policy — but only if the acquirer's PI is structured to take over the prior-acts liability. For starters, PII for a chartered (or chartered certified) accountant must be considered 'qualifying insurance'. Underwriters issuing qualifying insurance agree to abide by certain minimum terms on accountant PII, to make sure all chartered accounts maintain a certain standard of protection. Next, chartered accountants have to abide by certain minimum limits of insurance as stipulated by their accountancy body membership (e.g., ICAEW, ACCA).

• Online portal submission of insurance certificates is mandatory
• Broker's letter of confirmation is an acceptable temporary proof
• ACCA may conduct random audits of PI insurance documentation
• Record keeping of policies and certificates for at least six years
• Changes in insurer or policy number must be reported promptly

The required amount of professional indemnity dictated by these bodies is linked to fee income (both annual fee income and largest client fee income). BUT many accountancy businesses need to hold more depending on their fees and the work they do.

8. AAT Licensed Member PI requirements

Does my PI cover HMRC penalties and interest? PI does not cover fines or penalties imposed on the practitioner by HMRC, FRC, or any regulator (uninsurable as a matter of UK public policy). It does generally cover the client's damages where those damages include penalties or interest the client suffered because of the accountant's negligence. What is "run-off" cover and how long do I need it? Run-off is PI cover that continues after a firm ceases trading, covering claims that come in for work done before cessation.

How much does it cost?

Minimum: 6 years for ACCA, CIOT, ATT, AAT, IFA; minimum 2 years for ICAEW (industry standard 6 years). For audit and insolvency work, 10-15 years is prudent. I'm an ICAEW firm with £1.6m of fees — what's the minimum? So £3m is the minimum; "adequate" beyond £3m needs justification. What if I'm a member of both ICAEW and CIOT?

Your acceptance of these terms and conditions

You comply with the highest applicable standard. ICAEW's formula is usually higher than CIOT's at the firm sizes where this is a live question. Can I take a higher excess to reduce premium? Your regulator caps the excess (ICAEW: lower of £30k per principal or 3% of gross fees; ACCA: 2% of gross fees). Within that ceiling, you can negotiate — but the arithmetic of premium saving versus self-insurance retention rarely favours sole practitioners. Let's have a look at the minimum PII requirements as stipulated by the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA), since these are the two largest accountancy bodies in the UK. Under the ICAEW Professional Indemnity Insurance Regulations (effective September 2024), the previous £100,000 minimum has been abolished. For 2026, most chartered accountancy firms are now required to maintain a minimum limit of indemnity of £2 million for any one claim and in the aggregate.

• Trustee appointments often require specific PI insurance verification
• Insolvency practitioners have separate, statutory PI requirements
• Public sector appointments may have different insurance stipulations
• Working overseas may necessitate additional local insurance