DIE FAMILIE ROTEN

Thinking of closing or selling your practice?

Accountants Professional Indemnity Insurance
Other insurance for accountants
15. Insolvency practitioner PI and bonding
Does PI cover advice on cryptoassets?

ACCA partnered with Lockton to deliver a webinar on the new PII regulations on 20 September 2023.

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.

The session explained the PII changes and the implications for ACCA practitioners, and the transitional arrangements.

Accountants Professional Indemnity Insurance

As above — audit is a separately-underwritten activity even within a single PI policy. The work you do before you submit the renewal proposal form is what shapes the quote. We are happy to walk a practice through what to include and how to present it; it is, in our experience, the highest-leverage hour you spend each year. Apex is an independent FCA-authorised insurance broker. We are not tied to any one insurer, we are not a network, and we do not run our own policy or our own underwriting decision.

Past work

We act as your broker, which under FCA Conduct of Business rules means we represent your interests in the negotiation with the insurance market. In practice that means we take your renewal information, present it to insurers we think will price your particular profile sensibly, negotiate terms, explain the differences in wording between the quotes that come back, and document the decision so that it stands up to your own internal compliance review and your professional body's monitoring. We do not promise a particular price or a particular insurer — those are underwriting decisions that depend on your individual profile — and we do not have a quota with any insurer that would skew our recommendation. What we do guarantee, because it is regulatory, is that we act fairly, with integrity, and with reasonable skill and care, and that we tell you the basis on which we are remunerated. That information is on our Terms of Business page, and the route to raising any concerns about our service is on our Complaints page.

7.3 ATT discipline and run-off

If you are within ninety days of your PI renewal, this is the moment to look at the policy you currently hold and decide whether the limit, the wording, and the broker relationship are doing what you need them to. If you are mid-policy, this is the moment to make sure your file shows everything notifiable has been notified — the rules on disclosure during the bet free bets uk no deposit bonus year are strict and getting that wrong is the single most common reason a claim fails to be covered. To talk through your practice's PI position with an Apex broker, see the accountants sector page or contact us. The first conversation costs nothing and does not commit you to anything. PII is compulsory for all ACCA members who hold a practising certificate and engage in public practice and regulated activities in the UK and Ireland. View the Webinar on Regulatory changes and the implications for

Other insurance for accountants

Under transitional arrangements, PII policy renewals on or after 1 January 2024 must comply with new requirements. All existing PII policies must comply with the new requirements by 1 January 2025. The Global Practising Regulations (effective 1 September 2023) are available in the related downloads section of this page. Further details are provided in the Commentary on new PII Requirements (effective 1 September 2023) and in the Appendix there is a useful summary of the changes, including a comparison of the current and new PII requirements. A new Guidance Factsheet on PII Requirements (effective 1 September 2023) is also available in the related downloads section. your insurance Understand the requirements for Designated Professional Body, CILEX-

Type of Breach	Potential ACCA Action	Practice Implications	Rectification Period
No valid insurance in place	Suspension of practising certificate	Cannot undertake public practice work	Immediate
Inadequate policy limits	Formal warning, requirement to upgrade	Risk of non-compliant status with clients	30 days
Lack of required policy features	Directive to amend policy	Coverage gaps may leave firm exposed	60 days
Failure to provide evidence	Administrative fine, investigation	Delays in certificate renewal	14 days
Misrepresentation on application	Disciplinary proceedings, possible expulsion	Severe reputational damage	N/A

and CAA/ATOL-registered accountants To carry out certain regulated activities, accountancy firms may need to purchase additional levels of Professional Indemnity Insurance.

15. Insolvency practitioner PI and bonding

PII policies provide cover for practitioners against claims for professional negligence. Given the significant changes in the PII insurance market in recent times and the importance of PII in the public interest, ACCA has undertaken a review of the PII market and its current PII regulations and developed new PII requirements in consultation with practitioners and insurance brokers in both the UK and Ireland, explains Stefan Pegram, ACCA’s Director – Practice Regulation. ‘Our PII regulations must adapt to reflect changes in the insurance market, and we believe the new regulations are pragmatic and proportionate,’ Pegram says. ‘In developing the new PII requirements, we have strived to balance the interests of practitioners and their clients and also the views expressed by the market and other stakeholders. The proposed changes have been reviewed and approved by our public interest oversight boards and lead regulators, after consideration of the market insight and feedback,’ he adds.

12.2 Liability Limitation Agreements (LLAs)

‘The new requirements are simpler, more practical and align more closely with other professional accountancy bodies.’ ‘Ultimately, PII provides important protection for ACCA practitioners and their clients,’ Pegram says. ‘It is in the public interest, and the interests of our practitioners and firms, that this safeguard exists and does so without disproportionate regulatory burdens. If PII cover is inadequate or non-existent, claims brought against the firm are uninsured and the lack of protection exposes practitioners to significant business risk and the loss of their own personal assets.’ The key changes to regulation 2 (Interpretation) and regulation 9 (Professional indemnity insurance) of the Global Practising Regulations are as follows: New Total income bands and PII limits:Total Income ˂£600,000PII Limit Greater of:(i) two and a half times the firm’s relevant total income; and(ii) £100,000Total Income ≥ £600,000PII Limit At least £1.5 million Although expressed in pound sterling (GBP), the limits should be applied in local currency equivalents, such as the euro Twenty-five times the largest fee multiplier has been removed from calculation of PII limits Sub-contractors must be included in PII and FGI policies Liabilities covered extended to include sub-contractors Work sub-contracted included in total income Uninsured excess restricted to £20,000 per principal Minimum PII and FGI increased from £50,000 to £100,000 High risk exposures (such as such as cyber related events, tax planning or financial services) covered on an aggregate basis New regulations on Retroactive cover and Regulated work It should be noted that the PII limits are minimum requirements and practitioners must consider the risk profile of their work and their clients and determine whether or not they should carry PII cover in excess of the minimum required. For example, some regulated work will require higher levels of PII cover arising from legislative requirements, or the requirements set by national bodies or regulators in a particular sector. There are no changes to the requirements for continuity following cessation.

ICAEW Compliant Cover

Run-off cover provides important protection for consumers and members and the requirement for PII cover for a period of six years after ceasing to engage in public practice balances the interests of practitioners and consumers. It also aligns with the normal limitation period in statute of six years from the date on which the negligent act occurred. ACCA’s Regulatory Board took into consideration concerns about the availability of run-off cover in the current insurance market, but it decided that run-off cover should remain mandatory for a period of six years, due to the high level of claims arising more than two years following cessation and the need to provide member protection. The new PII requirements are effective from 1 September 2023. However, members and firms have been given a period of time to adjust to the changes and obtain PII cover which is compliant with the new regulations. Failure to do so could leave you exposed to risk in the event of a mistake, oversight or third-party claim.

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.

Below, we explain the requirements for Designated Professional Body, CILEX- and CAA/ATOL-registered accountants.

Practice Size (by staff)	Minimum Limit per Occurrence	Aggregate Limit	Typical Annual Premium Range (GBP)
Sole Practitioner	GBP 2,000,000	GBP 5,000,000	250 - 500
2-5 Staff	GBP 5,000,000	GBP 10,000,000	500 - 1,200
6-20 Staff	GBP 10,000,000	GBP 20,000,000	1,200 - 3,000
21+ Staff	Case-by-case assessment	Case-by-case assessment	3,000+

Professional Indemnity Insurance (PII) is compulsory for all ACCA members who hold a practising

Fines for non-compliance with Employers' Liability insurance are enforced by the Health and Safety Executive (HSE).
Operating without required motor insurance can lead to vehicle seizure, fines, and penalty points.
Breaching contractually agreed insurance levels can lead to contract termination and legal claims.
Operating without mandated Professional Indemnity can result in disciplinary action from your regulatory body.
Inadequate insurance can lead to personal liability for directors if the company cannot cover claims.

certificate and engage in public practice and regulated activities in the UK and Ireland.

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.

The limit required for PII is dependent on a firm’s relevant total

Does PI cover advice on cryptoassets?

Run-off is typically priced as a single up-front premium based on a multiple of your last year's working premium (commonly 100% to 250% across the run-off period in aggregate). Selling rather than winding down does not automatically transfer your run-off obligation to the acquirer. The sale documentation has to deal with it explicitly. We cover the practice-sale considerations in our companion article on practice mergers and sales for architects — the principles for accountants are very similar. Underwriters look at five things before they price your renewal.

12.6 The cost picture

Knowing what they look at lets you prepare a renewal submission that gets you a sensible quote rather than a reluctant one. What proportion of your fees comes from audit, from tax advice, from accounts preparation, from corporate finance, from MLR-supervised work, from insolvency, from outside-the-UK clients? Audit and tax advice carry higher loss costs in the underwriter's models; a practice that is 80% accounts-prep-for-OMBs and 20% personal-tax is a different risk from a practice that is 60% audit and 30% transaction work. Five years of claims, notifications and circumstances is the standard underwriter ask. A clean history priced through cleanly; a notified circumstance that hasn't crystallised into a claim still hangs over the renewal until it's closed out.

12.3 FRC sanctions

If you have a notification, the renewal submission should explain what the circumstance was, what was done about it, and why it shouldn't crystallise. Acting for financial services clients, listed companies, public sector bodies, charities, regulated professions (other accountants, solicitors), or businesses in sectors with high transaction activity carries different loss expectations. File reviews, peer review programmes, the firm's continuing professional development structure, software and audit-methodology choices. ICAEW's monitoring visits feed into how underwriters perceive a practice's risk discipline. Fifth, whether you are a registered auditor. income, details of which can be found in the ACCA PII Regulations.

Policy Feature	Requirement	Purpose / Rationale
Run-off Cover	Minimum 6 years post-termination	Covers claims arising from work done while insured
Breach of Confidentiality	Must be included	Protects against inadvertent data disclosure
Loss of Documents	Must be included	Covers costs of replacing or restoring documents
Libel and Slander	Must be included	Protects against defamation claims
Fidelity Guarantee	Optional but recommended	Covers client money dishonesty by employees