Here are four scenarios where PI Insurance has helped an SME accountant faced with a claim… An accountancy firm fails to comply with HMRC filing deadlines resulting in penalties for the client.

Review policy exclusions for cyber liability and data breaches
Consider standalone cyber insurance as a supplement to PI
Fidelity cover (for employee theft) is often a separate policy
Legal expenses insurance can be a valuable addition
Policy excess (deductible) should be set at an affordable level
Ensure the policy territory is worldwide for international clients
Negotiate a waiver of subrogation for key client contracts

An accountant fails to warn a client that the transfer of shares prior to the sale of a business will trigger a CGT charge. A complex claim as the client may not have warned the accountant of their intentions.

Coverage Element	Description	Typical Inclusion
Civil Liability	Covers negligence, error, or omission in professional services.	Standard
Defence Costs	Legal and investigation costs, often in addition to limit.	Standard
Loss of Documents	Covers costs to replace or restore lost/damaged client documents.	Standard
Libel & Slander	Covers defamation claims arising from professional activities.	Often Included
Fidelity Guarantee	Covers client money loss due to employee dishonesty.	Optional / Recommended

An accountancy firm acting as auditors for a client fails to detect fraudulent activity in an investment opportunity.

Minimum indemnity limit typically £50,000 for members in practice
Cover must be provided by an insurer authorized in the UK
Policy must cover civil liability from professional business activities
Run-off cover required upon retirement or cessation of practice

A complex case as the wrong doer will have gone out of their way to cover their tracks. An accountant uses third-party information to research the latest tax insights. Taking the information at face value, they give the wrong advice leading to losses for the client. Be aware of the regulatory status of your client and the impact of this on the limits and cover you need to recommend and the markets you can and cannot approach.

Exam Structure: ACA vs ACCA

Add portable equipment insurance to protect items like laptops and smartphones when used away from your offices. And, if you own the building, commercial property (buildings) insurance can cover the bricks and mortar. Note: to add any of the other covers you must first take out business contents insurance. Employers’ liability insurance can offerprotection against claims made against you by employees who have had an accident or fallen ill as a result of their work. For example, if one of your accountants claims you’vefailed to support them with work-related stress.

Is ACA or ACCA more respected?

Note that employers’ liability insurance can be required by law (external link) for any business that employs others. You can be fined up to £2,500 for every day you are not covered. Professional indemnity insurance is compulsory for members of accounting organisations like ACCA and ICAEW. PI cover can help to protect you against the cost of legal action if a client claims they lost money or suffered reputational damage as a result of your work, professional services or advice. Whether you’re settling or defending a claim, you can addlegal fee protection when you take out this insurance, too.Furthermore, in some circumstances, professional indemnity insurance for chartered accountantscan be mandatory.

How many PI insurers are there?

Each business is unique – some accountants may also choose to have public liability insurance. These are just some of the types of business insurance for accountants that we can offer. We can provide other specific types of cover and build them into a policy that’s tailored to the exact needs of your business. Hiscox professional indemnity insurance is relevant to many complaints an accountant can face. It can help to cover allegations of negligence, accidental breach of confidence and giving poor business advice. The primary capacity that Aqueous have secured is all fully compliant with the necessary accounts regulatory bodies.

5. ICAS — the Scotland position

Should you provide good-faith tax guidance which turns out to be misplaced, we may help to pay related legal fees and compensation. Likewise, if your cashflow forecasts turn out to be incorrect and a client sues, insurance can help with the aftermath. Our professional indemnity insurance can also be suitable for tax accountants and company registrars as well as auditing and payroll professionals. This means a wide range of industry activities, from filing to invoicing, are covered. Every business entity is liable to members of the public for injuries or property damage that might occur because of its activities.

15.2 The IP Bond — the statutory bond

Public liability insurance is designed to help absorb the cost of such cases. Many businesses can face public liability claims, even if they aren’t public-facing – for instance, an office sign could fall from a commercial building. However, public liability insurance might be more relevant to businesses with frequent client interactions. The organisations that facilitate the training and qualification of chartered accountants in the UK and globally will set the rules for their members’ professional indemnity requirements, and this will often include minimum limits for members to have in place for their business. The two main bodies for chartered accountants are ACCA and ICAEW.

4.3 Excess limits

ACCA (external link) is a global organisation for professional accountants. To become a member of the organisation and an ACCA chartered accountant, you must take and pass the ACCA Qualification. As a member, you are required to have professional indemnity insurance. The ICAEW (external link) is the only body in the UK that publishes minimum terms for the Professional Indemnity coverage it requires its chartered members to have. Hiscox has a Chartered Accountant policy wording that meets all the ICAEW minimum terms requirements. Beyond regulatory hygiene, be clear about what matters most to your clients and how they operate.

Work Experience: A Key Structural Difference

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.

11.3 Aggregate versus any-one-claim

At Nova Insurance, we offer cover that meets these requirements, helping you stay compliant while your services and experience grow over time. It’s not easy running an SME in 2023. You know it, we know it, and accountancy business owners certainly know it. From rising costs to fierce competition for customers, it’s no wonder insurance sometimes gets pushed to the bottom of the pile. But every SME needs a safety net.

Cancellation and termination

Just look at the stats: BIBA data suggests nearly one in five businesses suffer a major disruption every year. For smaller companies, even the slightest mistake or bad luck can leave it struggling to survive. This is why having fit-for-purpose professional indemnity (PI) insurance makes so much sense. With 26% of the annual total insurance claims in the UK relating to professional indemnity issues, it helps accountancy firms manage risk, and ultimately helps protect the business if an error should occur. Whilst it is not a legal requirement for accountants to take out PI insurance, for many accountants (such as members of the ICAEW, ICAS or ACCA) it is a regulatory requirement to buy PI cover that complies with the respective association rules. Each one is different, so you need access to a range of products that can be tailored to your customers’ needs.

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

Look for comprehensive products that are simple and quick to arrange.

1. Why accountants are a distinct PI class

These rules can not only set out the limits required, but also mandate the specification of the wording and the Insurers that can be used. For those “unregulated” firms, PI cover is still arguably a business necessity to provide the firm with the requisite legal expertise and financial resources to ensure the stability of their business should the worst happen. With PI cover, mistakes can be sorted out quickly and easily, with minimum disruption and expense. Even if it’s never used, having PI insurance provides reassurance for clients, giving them one more reason to trust an accountant with their finances. Within a heightened regulatory environment, the combination of more intervention and evolving standards means an increase in the number of claims. At Aqueous, quoting and binding on our e-trade platform can take less than five minutes, with experienced underwriters on hand to give you all the information you need.

Rating Factor	High-Risk Example	Lower-Risk Example	Impact on Premium
Services Offered	Insolvency, M&A advice	Bookkeeping, payroll	High for complex services
Claims History	Multiple past claims	Clean record	Significant increase with claims
Client Types	High-net-worth, listed companies	Small local businesses	Higher for complex clients
Risk Management	Poor file reviews, no engagement letters	Strong systems, CPD, quality control	Discounts for good systems

All our products are underwritten by A-rated (or above) insurers, meaning quality and reliability is guaranteed.

What Services Do You Provide?

Other professional bodies that ask for their members to have PI cover include: Hiscox accountants’ insurance is comprehensive and flexible, so you can tailor the cover to meet the requirements of your professional body. “With 20 years in the industry, I am a professional indemnity insurance specialist. I champion keeping our policy wordings as ‘plain English’ as possible and stamping out unnecessary jargon. Clarity is key when talking to customers about their professional indemnity cover.” - Liam Barry, PI Underwriting Manager (Emerging and Traditional) At Nova Insurance, we provide dedicated support for accountants and bookkeeping professionals across the United Kingdom. Our UK based team is available six days a week to assist you with your insurance needs.

12.4 The audit-claim hot spots

We will guide you through the quotation process, offering clear advice and practical support to help you find the right level of cover for your business. All calls are free of charge through our 0800 numbers. If it is more convenient, you can request a callback and one of our advisers will contact you at a time that suits you. To get started, simply complete our online form or contact our team directly. More than 27,000 clients choose Nova Insurance to protect their businesses with dependable and specialist insurance solutions tailored to their needs.

15.5 Bonding versus PI — the line in practice

That is why we bet top betting websites sports can provide instant cover when required, with policy documents sent directly to your email within minutes of confirmation. 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. Each product has been carefully designed to cover the risks faced by specific professions, based on our experience of the market.

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