What Is the Minimum Professional Indemnity Cover Required for Accountants?

Even a small mistake in accounts submitted to HM Revenue and Customs can lead to unexpected tax bills for clients. If this happens, they may hold your business responsible and pursue legal action to recover their losses. Nova Insurance offers tailored cover for accountants that can include Professional Indemnity Insurance, helping to protect your firm against legal costs and compensation claims.

This support applies whether the issue is a genuine error or an unfounded allegation, giving your business greater peace of mind when working with clients. If your accountancy office is targeted by thieves, the impact can be serious. Modern practices often rely on laptops, monitors, and communication equipment for day to day client work and remote meetings. If these items are stolen during a break in, it can disrupt your ability to operate and serve your clients effectively. Business contents insurance can help cover the cost of replacing essential equipment, allowing your practice to recover more quickly and continue working with minimal downtime. Many accountants who belong to organisations such as the AAT or ACCA are required to hold a minimum level of Professional Indemnity Insurance to maintain their membership. At Nova Insurance, we offer cover that meets these requirements, helping you stay compliant while your services and experience grow over time.

• 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.

New regulations have significant implications for accountants A series of new regulations, either recently introduced or due to come into force, are set to bring significant implications for the accountancy sector.

How to Access Our PI Insurance

Even a small mistake in accounts submitted to HM Revenue and Customs can lead to unexpected tax bills for clients. If this happens, they may hold your business responsible and pursue legal action to recover their losses. Nova Insurance offers tailored cover for accountants that can include Professional Indemnity Insurance, helping to protect your firm against legal costs and compensation claims. This support applies whether the issue is a genuine error or an unfounded allegation, giving your business greater peace of mind when working with clients. If your accountancy office is targeted by thieves, the impact can be serious.

Client base

Modern practices often rely on laptops, monitors, and communication equipment for day to day client work and remote meetings. If these items are stolen during a break in, it can disrupt your ability to operate and serve your clients effectively. Business contents insurance can help cover the cost of replacing essential equipment, allowing your practice to recover more quickly and continue working with minimal downtime. Many accountants who belong to organisations such as the AAT or ACCA are required to hold a minimum level of Professional Indemnity Insurance to maintain their membership. At Nova Insurance, we offer cover that meets these requirements, helping you stay compliant while your services and experience grow over time. For firms, these new regulations (around anti-money laundering, register of overseas entities, probate and PII) create risks, at such time until they are embedded into business-as-usual practices. In order to minimise the likelihood of increased premiums, accountancy firms should take steps to familiarise themselves with the regulations and implement necessary changes as soon as possible. In September 2022, updates to the existing UK anti-money laundering (AML) legislation came into force.

• Failure to display the EL certificate can result in a £1,000 fine.
• Records of EL insurance must be kept for 40 years, as claims can be made long after exposure.
• Even if you are a limited company, inadequate insurance can pierce the corporate veil in cases of negligence.
• Business rates or utility providers may require proof of insurance before providing services.
• Minimum requirements are a baseline; adequate cover should be based on a full risk assessment.
• Online business portals may require uploading insurance certificates to maintain seller status.
• Employee count fluctuations must be reported to your insurer to maintain valid EL cover.

In particular, the updates made a number of amendments to bet free bets uk no deposit bonus the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). Although many of the changes do not affect accountancy firms, there are certain areas of which they should be aware: All supervised firms are now required to perform a proliferation financing (PF) risk assessment to assess the risk that it may be used to enable proliferation financing Discrepancy reporting requirements are no longer limited to the onboarding stage of a business relationship, but have become an ongoing obligation The MLRs have been widened to apply to Limited Partnerships registered in England and Wales and Northern Ireland (Scottish Limited Partnerships are already subject to the regulations).

Does PI cover tax return errors?

That’s why it’s important to have sufficient business insurance in place. If you’re a member of a professional body like the ICAEW or ACCA, you are required to have a certain level of professional indemnity cover to practice. We can tailor your accountancy insurance to your business needs so you can service clients with your back covered and without the worry of paying out of your own pocket. When carrying out daily work, as an accountant, you could run into many risks. You make a financial error in a client’s account You suffer a data breach that exposes sensitive client information A fire breaks out on your premises An employee suffers an injury at work A client suffers an injury at your workplace If you’re self-employed and not a chartered accountant, it isn’t mandatory.

6.1 The CIOT minimum

But if you’re licensed to practice accountancy by ACCA, AAT, ICAEW, ICAS or CIMA, then you’re required to take professional indemnity insurance out. If you employ anyone, you’ll need to take out employer’s liability insurance by law, whether you are chartered or not. Even a small mistake in accounts submitted to HM Revenue and Customs can lead to unexpected tax bills for clients. If this happens, they may hold your business responsible and pursue legal action to recover their losses. Nova Insurance offers tailored cover for accountants that can include Professional Indemnity Insurance, helping to protect your firm against legal costs and compensation claims. Failure to comply with AML regulations can have serious consequences for the offending firm, including fines and sanctions, criminal proceedings and significant reputational damage. Firms at the point of renewal for their PI cover should anticipate additional scrutiny from insurers around the newly introduced regulations. On 1 August 2022, the UK government introduced the register of overseas entities (ROE): a new requirement for all overseas entities that own property in the UK to record information about themselves and their beneficial owners on a new register at Companies House by 31 January 2023. As part of the registration process, accountants may be required to perform verification of an overseas entity’s registrable beneficial owners. By nature, this is risky work, as an overseas entity will involve corporate structures spanning multiple jurisdictions. The inclusion of a strict liability within the ROE regime raises the possibility that any firm undertaking verification work will be exposed to possible criminal prosecution, regulatory sanction, and reputational damage should the verification function not be performed correctly. Firms’ increased liabilities under the ROE are already giving insurers cause for concern. The heightened exposure of accountancy firms to overseas entities raises the possibility that such firms will be used for the purposes of money-laundering or sanctioned individuals, where it is not possible to correctly identify true ownership. Following the withdrawal of the Association of Chartered Certified Accountants (ACCA) from legal services, all accountancy firms wishing to offer probate work to their clients must set up a separate limited company or LLP firm to be designated as a CILEx-ACCA Probate Entity. All owners and directors of the Probate Entity must also be authorised as CILEx Practitioners, which requires first successfully completing an accredited course and assessment with an approved provider, covering specific areas of probate work. In the absence of standalone insurance products for probate work, all work conducted by the Probate Entity must be covered under the accountancy firm’s general professional indemnity bet betting apps with sign up bonus no deposit (PI) insurance. In addition to the above external regulations, changes to the ACCA professional indemnity (PI) insurance regulations are due to come into effect in September 2023. The minimum limits of indemnity will increase from £50,000 to £100,000, which will affect smaller practices. It has been recognised for some time that this limit is not sufficient to reflect increasing legal costs and claim payments.

• Public Liability insurance is not a legal minimum but is often required for contracts and leases.
• Professional Indemnity insurance is a legal requirement for certain professions like financial advisors.
• Motor insurance is a legal minimum for any company vehicles, with at least third-party cover.
• Product Liability insurance may be required if you manufacture, supply, or repair goods.
• Directors' and Officers' Liability insurance is not legally required but is critical for risk management.

Other income bands and limits have also changed. The minimum limit for Fidelity Guarantee Insurance (FGI) has increased from £50,000 to £100,000 and firms need to ensure sub-contractors are covered. This is an area where we’ve seen a number of claims in recent years. Retroactive cover requirements have been introduced and PII policies should include full retroactive cover ie from the date the practice commenced. This is to counteract issues such as where some insurers state ‘when PI cover was first purchased’, which places onus on the insured to prove they have had cover for past liability. For certain high-risk activities where it can be difficult to place PI cover – such as tax mitigation work, financial services, and cyber related events – this can now be placed on an aggregated basis, as insurers can be more inclined to quote. Members and firms have a period of time to adjust to the changes in the PII requirements and obtain PII cover which is compliant with the new regulations. Under transitional arrangements, PII policy renewals on or after 1 January 2024 must comply with the new requirements. To avoid an increase in premiums, firms should take an active approach to ensure that they familiarise themselves with the new regulations, and take steps to address potential exposures: Identifying the ways in which AML regulations demand a change in business practice, and instilling the appropriate changes as part of business-as-usual practice as soon as possible. Firms should consider carefully whether they should undertake ROE work, weighing the business rationale bet betting sites with fast withdrawal for doing so against the potential risk exposures.

Published: Thursday, 8 July 2021

This support applies whether the issue is a genuine error or an unfounded allegation, giving your business greater peace of mind when working with clients. If your accountancy office is targeted by thieves, the impact can be serious. Modern practices often rely on laptops, monitors, and communication equipment for day to day client work and remote meetings. If these items are stolen during a break in, it can disrupt your ability to operate and serve your clients effectively. Business contents insurance can help cover the cost of replacing essential equipment, allowing your practice to recover more quickly and continue working with minimal downtime. If they do undertake ROE verification work, firms should ensure that verification is completed based on documents from a reliable source, independent of the client, and they should consider how often verification procedures must be repeated. Where required documentation for the ROE is only available to a client, firms should consider how else they might verify the information (for example, by seeking confirmation from the legal firm that drafted it). Where firms have created a separate Probate Entity for the undertaking of probate work, they must ensure all owners and directors are authorised as CILEx Practitioners.

Changes ahead for ACCA member firms

If they do undertake ROE verification work, firms should ensure that verification is completed based on documents from a reliable source, independent of the client, and they should consider how often verification procedures must be repeated. Where required documentation for the ROE is only available to a client, firms should consider how else they might verify the information (for example, by seeking confirmation from the legal firm that drafted it). Where firms have created a separate Probate Entity for the undertaking of probate work, they must ensure all owners and directors are authorised as CILEx Practitioners. All practising staff should be made aware of the relevant updates and training provided to ensure compliance with AML, ROE verification, probate, and ACCA PII requirements. On 20 September 2023 from 12.30pm-1.30pm, please join us for a webinar to discuss regulatory changes and the impact this may have on your insurance.

What’s included in Hiscox professional indemnity insurance for chartered accountants?

This session will further explain the changes and the implications for ACCA practitioners, and the transitional arrangements. Catherine Davis, ACCA relationship manager, Lockton companies If you have any questions about professional indemnity insurance please contact your Lockton Account Manager for further advice or email accountants@uk.lockton.com. Protect against claims made by clients or partners 86% of businesses are happy with our customer service We compare a vetted panel of trusted business suppliers Bionic specialises in business insurance for small businesses and sole traders, like accountants Get cover to protect against claims from clients, partners and more. Bionic is trusted by UK businesses and won 'Highly Commended' at the 2025 Insurance Broker Awards When you’re dealing with accounts and tax returns for clients accuracy is key, but you can’t eliminate human error. Similarly, if you have an office or employ anyone, you could also run into risks of injury, fire or theft. All practising staff should be made aware of the relevant updates and training provided to ensure compliance with AML, ROE verification, probate, and ACCA PII requirements.

Frequently asked questions

Other income bands and limits have also changed. The minimum limit for Fidelity Guarantee Insurance (FGI) has increased from £50,000 to £100,000 and firms need to ensure sub-contractors are covered. This is an area where we’ve seen a number of claims in recent years. Retroactive cover requirements have been introduced and PII policies should include full retroactive cover ie from the date the practice commenced. This is to counteract issues such as where some insurers state ‘when PI cover was first purchased’, which places onus on the insured to prove they have had cover for past liability.

15.2 The IP Bond — the statutory bond

For certain high-risk activities where it can be difficult to place PI cover – such as tax mitigation work, financial services, and cyber related events – this can now be placed on an aggregated basis, as insurers can be more inclined to quote. Members and firms have a period of time to adjust to the changes in the PII requirements and obtain PII cover which is compliant with the new regulations. Under transitional arrangements, PII policy renewals on or after 1 January 2024 must comply with the new requirements. To avoid an increase in premiums, firms should take an active approach to ensure that they familiarise themselves with the new regulations, and take steps to address potential exposures: Identifying the ways in which AML regulations demand a change in business practice, and instilling the appropriate changes as part of business-as-usual practice as soon as possible. Firms should consider carefully whether they should undertake ROE work, weighing the business rationale bet betting sites with fast withdrawal for doing so against the potential risk exposures. On 20 September 2023 from 12.30pm-1.30pm, please join us for a webinar to discuss regulatory changes and the impact this may have on your insurance.

How does PI interact with the Money Laundering Regulations?

By nature, this is risky work, as an overseas entity will involve corporate structures spanning multiple jurisdictions. The inclusion of a strict liability within the ROE regime raises the possibility that any firm undertaking verification work will be exposed to possible criminal prosecution, regulatory sanction, and reputational damage should the verification function not be performed correctly. Firms’ increased liabilities under the ROE are already giving insurers cause for concern. The heightened exposure of accountancy firms to overseas entities raises the possibility that such firms will be used for the purposes of money-laundering or sanctioned individuals, where it is not possible to correctly identify true ownership. Following the withdrawal of the Association of Chartered Certified Accountants (ACCA) from legal services, all accountancy firms wishing to offer probate work to their clients must set up a separate limited company or LLP firm to be designated as a CILEx-ACCA Probate Entity.

2.2 The "highest-bar" principle

All owners and directors of the Probate Entity must also be authorised as CILEx Practitioners, which requires first successfully completing an accredited course and assessment with an approved provider, covering specific areas of probate work. In the absence of standalone insurance products for probate work, all work conducted by the Probate Entity must be covered under the accountancy firm’s general professional indemnity bet betting apps with sign up bonus no deposit (PI) insurance. In addition to the above external regulations, changes to the ACCA professional indemnity (PI) insurance regulations are due to come into effect in September 2023. The minimum limits of indemnity will increase from £50,000 to £100,000, which will affect smaller practices. It has been recognised for some time that this limit is not sufficient to reflect increasing legal costs and claim payments. This session will further explain the changes and the implications for ACCA practitioners, and the transitional arrangements. Catherine Davis, ACCA relationship manager, Lockton companies If you have any questions about professional indemnity insurance please contact your Lockton Account Manager for further advice or email accountants@uk.lockton.com. Protect against claims made by clients or partners 86% of businesses are happy with our customer service We compare a vetted panel of trusted business suppliers Bionic specialises in business insurance for small businesses and sole traders, like accountants Get cover to protect against claims from clients, partners and more. Bionic is trusted by UK businesses and won 'Highly Commended' at the 2025 Insurance Broker Awards When you’re dealing with accounts and tax returns for clients accuracy is key, but you can’t eliminate human error. Similarly, if you have an office or employ anyone, you could also run into risks of injury, fire or theft.

• 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.

That’s why it’s important to have sufficient business insurance in place. If you’re a member of a professional body like the ICAEW or ACCA, you are required to have a certain level of professional indemnity cover to practice. We can tailor your accountancy insurance to your business needs so you can service clients with your back covered and without the worry of paying out of your own pocket. When carrying out daily work, as an accountant, you could run into many risks. You make a financial error in a client’s account You suffer a data breach that exposes sensitive client information A fire breaks out on your premises An employee suffers an injury at work A client suffers an injury at your workplace If you’re self-employed and not a chartered accountant, it isn’t mandatory. But if you’re licensed to practice accountancy by ACCA, AAT, ICAEW, ICAS or CIMA, then you’re required to take professional indemnity insurance out.

Structured data

New regulations have significant implications for accountants A series of new regulations, either recently introduced or due to come into force, are set to bring significant implications for the accountancy sector. For firms, these new regulations (around anti-money laundering, register of overseas entities, probate and PII) create risks, at such time until they are embedded into business-as-usual practices. In order to minimise the likelihood of increased premiums, accountancy firms should take steps to familiarise themselves with the regulations and implement necessary changes as soon as possible. In September 2022, updates to the existing UK anti-money laundering (AML) legislation came into force. In particular, the updates made a number of amendments to bet free bets uk no deposit bonus the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).

Need some help?

Although many of the changes do not affect accountancy firms, there are certain areas of which they should be aware: All supervised firms are now required to perform a proliferation financing (PF) risk assessment to assess the risk that it may be used to enable proliferation financing Discrepancy reporting requirements are no longer limited to the onboarding stage of a business relationship, but have become an ongoing obligation The MLRs have been widened to apply to Limited Partnerships registered in England and Wales and Northern Ireland (Scottish Limited Partnerships are already subject to the regulations). Failure to comply with AML regulations can have serious consequences for the offending firm, including fines and sanctions, criminal proceedings and significant reputational damage. Firms at the point of renewal for their PI cover should anticipate additional scrutiny from insurers around the newly introduced regulations. On 1 August 2022, the UK government introduced the register of overseas entities (ROE): a new requirement for all overseas entities that own property in the UK to record information about themselves and their beneficial owners on a new register at Companies House by 31 January 2023. As part of the registration process, accountants may be required to perform verification of an overseas entity’s registrable beneficial owners. If you employ anyone, you’ll need to take out employer’s liability insurance by law, whether you are chartered or not.