For accountants, professional indemnity insurance isn't legally required – but if you're licensed by ICAEW, ACCA, AAT, ICAS or CIMA, it's a condition of practising, with formulas that dictate your minimum cover. And the claims are real: an estimated 70% of accountants' PI claims relate to tax work. This guide covers the body-by-body requirements, costs, and providers.
What insurance does an accountant need?
Professional indemnity – required by your body. The minimums differ and matter: - ICAEW (from Sept 2024): £2m any-one-claim for firms with fee income over £800k; below that, 2.5× gross fee income with a £250,000 floor. Cover must be with an ICAEW participating insurer on approved minimum wording, with six years' retroactive cover; two years' run-off on closure. - ACCA: 2.5× annual income with a £100,000 floor for firms under £600k income; six years' run-off expected on ceasing to trade. - AAT: any-one-claim basis; sole traders the greater of £50,000 or 2.5× gross fee income; partnerships/companies £100,000 floor. - CIMA: members in practice must hold PI; no prescribed level. Probate work carries its own accreditation minimums (ICAEW: £500,000 per claim), and insurance-mediation activities trigger euro-denominated FCA-derived limits.
The rest of the package: employers' liability (legal requirement with staff), cyber (client financial data is exactly what attackers want), office contents, and – valuable in this trade – tax investigation/legal expenses cover for HMRC enquiry costs. Document cover (restoring lost client records) is commonly built into accountants' wordings.
How much does it cost?
Accountancy is one of the cheaper PI professions relative to fee income: specialist brokers cite rates of roughly 0.3%–1.5% of fee income, versus 1.5–5% for solicitors. Entry pricing from around £5/month exists for small, low-risk practices (ICPA cites this floor); PolicyBee quotes online for turnovers to £500k; a typical sole practitioner lands £150–£500/year, with audit, corporate finance, trusts/wills and tax-scheme work rating hardest (the low→high risk gradient runs: bookkeeping/personal tax → payroll/audit/insolvency → corporate finance, trusts, tax schemes).
Comparison of providers
| Provider | Type | Notable features |
|---|---|---|
| Gallagher | Specialist broker | Dedicated accountants' PI practice; strong on body-compliance and run-off structuring |
| PI Expert / specialist PI brokers | Specialist brokers | Access to all qualifying insurers; wordings matched to ICAEW/ACCA/AAT rules |
| ICPA membership | Association scheme | AXA-backed, ICAEW-compliant cover bundled with membership (advice lines, CPD) |
| PolicyBee | Broker | Online quotes to £500k turnover; clear body-by-body guidance; note its thin, weak Trustpilot profile before buying on service |
| Hiscox | Direct insurer | Premium option for smaller practices; 4.4 Trustpilot |
| Markel Direct / Simply Business / AXA | Direct/comparison | Sensible for unregulated bookkeeper-accountants without body minimums |
Which route suits whom? Chartered/licensed practices: a specialist broker or the ICPA scheme – the wording must match your body's approved minimums, which is exactly what generalists get wrong. Unregulated practitioners: the online direct market works fine. Anyone doing probate, audit or FCA-regulated work: broker, without question.
Reviews and expert ratings
Hiscox 4.4/5 Trustpilot; Simply Business 4.2; Markel 4.0 (4.7 Feefo); AXA 4.3. Which? and Fairer Finance don't rate accountants' PI; the quality gates are your body's participating-insurer list and approved wording.
Key takeaway
Know your body's formula, insure at or above it on compliant wording, and disclose your work split honestly – tax work drives 70% of claims and underwriters rate accordingly. Add tax-investigation cover (clients increasingly expect you to have it) and plan run-off before you need it: ICAEW wants two years, ACCA six.
Sources
- icaew.com/regulation/professional-indemnity-insurance (Sept 2024 regulations)
- icpa.org.uk (minimum-cover guides; ICAEW/ACCA/AAT formulas; £5/mo floor)
- policybee.co.uk/accountants-insurance (body-by-body requirements)
- professionalindemnity.co.uk/professions/accountants/ (rates 0.3–1.5%; claims mix)
- ajg.com/uk (Gallagher accountants' PI); piexpert.co.uk