New ACCA PII Regulations

IP cover is often quoted as a separate section within the practice’s PI or as a standalone policy; mixed accountancy/IP firms should

5. ICAS — the Scotland position

In such cases the insurer’s response depends on whether the claim, in substance, alleges negligence resulting in loss or merely disputes the fee. Strong engagement letters and clear scope definition are the first line of defence. PI responds to civil claims arising from professional services, including claims where inadequate AML procedures caused a client or third party loss. It does not respond to AML regulatory fines from HMRC, the FCA, the SRA or the supervisory body — those are excluded as a matter of insurance law. Defence costs of an AML supervisory investigation are sometimes covered under a regulatory defence sub-limit.

What if my firm has become insolvent?

The main exposure for accountancy practices is the regulator’s penalty, which is uninsurable; the second exposure is the consequential cost of remediating documentation gaps and reputation damage. Under the ICAEW PII Regulations, qualifying insurance is PI cover provided by an insurer that has signed ICAEW’s Participating Insurer Agreement and that meets the minimum prescribed wording. Buying from a non-participating insurer — even at lower premium or with broader cover — does not satisfy the regulatory requirement and may put ICAEW practising certificate authorisation at risk. The current list of Participating Insurers is published on the ICAEW website and changes periodically; the broker should confirm participating status before binding cover. ACCA requires six years of run-off cover for ceased practices.

Pro Members – £300k Cover

ICAEW requires two years of run-off cover under its participating insurer regime, which is shorter than ACCA — practices that hold both registrations must meet the longer ACCA period. AAT requires a “reasonable period” but does not fix a minimum number of years; six years matches the basic contractual limitation period and is widely viewed as a sensible floor. Practices with significant audit, tax planning or trust work often extend voluntarily to ten or twelve years to match longer limitation tails. Standard insuring clauses respond to claims by anyone alleging the practice’s negligent professional services caused them financial loss — not just clients. The classic third-party claim is from a lender or buyer who relied on financial statements or a due diligence report prepared for the client. ensure both sets of regulator requirements are met.

Membership Conditions and Additional Premiums

The Caparo v Dickman line of authorities sets boundaries on third-party duty of care, but where duty exists, PI normally responds. Practices producing reports knowing third parties will rely on them should consider explicit assignee / reliance language and confirm wording response. Insolvency Practitioner work is regulated separately by recognised professional bodies under the Insolvency Act 1986 and Insolvency Rules 2016. IPs must hold PI as a condition of their licence — the relevant body sets requirements that broadly mirror the accountancy regulator’s. Insolvency claims tend to come from creditors, directors of the insolvent entity, or HMRC, and quantum can be material. Yes, company secretarial services — filings at

• 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.

Companies House, maintenance of statutory registers, advice

• 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.

on directors’ duties, share allotments and transfers

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The wording of the insuring clause and the burden of proof matter — clear file notes and contemporaneous evidence of advice help when defending. Tax Investigation cover (also called Fee Protection insurance) pays the professional fees the client incurs when HMRC opens an enquiry into their tax affairs, regardless of whether the practice was at fault. PI covers claims against the practice for negligent professional services. The two complement each other: a HMRC enquiry that uncovers an error caused by the practice’s negligence might be funded under Tax Investigation cover at the client level, then trigger a PI claim against the practice for the client’s additional loss. Many practices offer Tax Investigation as a client product and hold PI for their own protection.

9.3 Run-off

Yes, payroll services and Construction Industry Scheme administration are normally within the “professional services” definition of an accountancy PI policy. Claims typically arise from missed PAYE deadlines, incorrect tax codes applied, missed RTI submissions, CIS verification failures, and miscalculation of pension auto-enrolment contributions. The consequential client loss can be significant where penalties and interest mount up. High-volume payroll bureaus face specific underwriting attention; the controls in place — software, second-checks, deadline tracking — matter for both pricing and coverage. Annual Tax on Enveloped Dwellings (ATED), Stamp Duty Land Tax (SDLT), Capital Gains Tax 60-day returns, P11Ds, P60s, VAT returns and similar filings are all within scope of standard accountancy PI.

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

The risk profile varies sharply: SDLT errors on multiple-property purchases or commercial transactions can generate six-figure claims, while a missed VAT return is usually a smaller exposure. Practices doing significant SDLT advisory work (particularly multiple dwellings relief, mixed-use claims) should mention this at proposal — some insurers price it specifically. Most PI policies include a “fees exclusion” that excludes claims by clients seeking reduction or refund of the practice’s own fees. The exclusion exists because fee disputes are commercial disagreements, not professional negligence. The line can bet online betting sites uk list blur — a client may frame a fee complaint as a negligence claim (“the work wasn’t worth what you charged because it was wrong”). — are within the standard “professional services” definition.

What the insurer underwrites on

Under the ICAEW Professional Indemnity Insurance Regulations as revised with effect from 1 September 2024, member firms must hold qualifying insurance with a Participating Insurer that has signed ICAEW’s Participating Insurer Agreement. The minimum limit of indemnity is £2 million for any one claim and in the aggregate for firms with gross fee income above £800,000. For firms below £800,000 fee income, the minimum is two and a half times gross fee income subject to an absolute floor of £250,000. Firms with gross fee income above £50m are not required to hold qualifying insurance but must demonstrate “appropriate arrangements”. The maximum permitted aggregate excess is the higher of £3,000 or 3% of gross fee income.

3.5 Participating Insurers and the master policy regime

ACCA members in practice are bound by the ACCA Rulebook PI requirements. Firms with total income below £600,000 must hold the greater of 2.5 times total income or £100,000; firms with total income of £600,000 or more must hold at least £1.5 million. ACCA also requires six years of run-off cover following cessation, and (for firms with principals or staff) fidelity guarantee insurance to protect client money. A practice holding both ICAEW and ACCA registration must meet whichever regulator’s bar is higher on each individual metric — the requirements do not net off. AAT licensed members in practice need PI cover on an “any one claim” basis.

Professional Indemnity Insurance Regulations

The AAT minimum is the greater of 2.5 times gross fee income or a structure-dependent floor — £50,000 for sole traders, £100,000 for partnerships and limited companies — with a maximum required limit of £1 million once gross fee income exceeds £400,000. AAT’s monitoring will check evidence at licence renewal and on request. The minimums are lower than ICAEW and ACCA, reflecting the typically smaller scale of AAT licensed practices, but the same general principles about adequacy of cover apply. The minimum is rarely the right answer. The right limit depends on the largest individual exposure a single client could suffer from an error on your work. Claims typically arise from missed filing

• Insurance requirements can be stipulated in the Articles of Association for limited companies.
• Shareholders' agreements may mandate specific Directors' and Officers' Liability cover levels.
• Bank loans or financing agreements often require asset and key person insurance as collateral.
• Landlord lease agreements frequently require tenants to have Public Liability insurance.

deadlines (resulting in strike-off or fines), errors

on share registers (resulting in disputes over

• UK employers must have Employers' Liability (EL) insurance with a minimum cover of £5 million.
• The EL certificate must be displayed at each business premises where employees work.
• Insurance must be provided by an authorised insurer under the Financial Services and Markets Act 2000.
• Cover is required for all employees, including temporary, casual, and contracted staff.
• Certain businesses, like family businesses with no direct employees, may be exempt.
• Failure to have EL insurance can result in fines of up to £2,500 per day.

ownership) and procedural failures in corporate restructurings.

PII Limit of Insurance Tables for Accountants

A practice that signs off accounts used in a £5m business sale, or files a tax return for a client with £20m of capital gains, has individual exposures far above any regulator floor. A practical test: think about your three largest live engagements; your limit should comfortably exceed the worst-case financial exposure on the most exposed one, with headroom for defence costs. Owner-managed-business practices typically buy £500,000 to £1m; firms with corporate finance or insolvency capability typically buy £2m upwards; audit firms substantially more. Generally yes, where the claim is for the consequential loss caused by negligent tax advice — for example, additional tax, bet legit betting sites interest, penalties and professional fees the client incurs because of your error. The tax itself the client should have paid anyway is usually not recoverable from a PI policy because the client would have paid it regardless.

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Aggressive tax avoidance scheme work has historically been a source of contested coverage; many PI policies now exclude or sub-limit claims arising from disclosable tax avoidance schemes. Practices doing tax planning should specifically check the wording. Yes, but audit work is one of the highest-risk and most carefully underwritten activities in the accountancy PI market. Statutory audit claims have been a major loss source for insurers — failed audits of insolvent or near-insolvent entities can generate claims in the tens of millions. PI cover for audit work is available but premium rates per pound of audit fee are significantly higher than for accounts preparation.

15.3 The PI position — RPB requirements

Insurers ask supplementary questions about audit clients’ sectors, sizes and any “special interest” entities (pension schemes, FCA-regulated, listed). Smaller audit firms have seen capacity tighten materially in recent years. Yes — a tax return prepared negligently that results in the client paying additional tax, interest or penalties can be a PI claim for the additional non-tax cost. The defining feature is whether the client suffered loss beyond the tax they would always have owed. For example, a missed loss claim that becomes irrecoverable due to a time limit is a real loss to the client; an arithmetic error caught by HMRC before submission is usually not.