Bookkeeping is the gentle end of the accountancy risk spectrum – but "gentle" isn't "risk-free," and if you're licensed by AAT, ICB or IAB, professional indemnity is a membership condition with defined minimums. The good news: bookkeepers buy some of the cheapest PI in the professional world. This guide covers requirements, costs and providers.
What insurance does a bookkeeper need?
Professional indemnity. The core cover for errors with consequences: a misposted VAT return triggering penalties, a payroll error, missed filing deadlines. Body minimums where licensed – AAT: any-one-claim basis, sole traders the greater of £50,000 or 2.5× gross fee income (partnerships/companies £100k floor); ICB and IAB set their own comparable requirements (check current levels). Unregulated bookkeepers face no mandate, but clients and accountant-partners increasingly ask for evidence of cover.
Cyber insurance – genuinely relevant here. Bookkeepers hold client bank details, payroll data and accounting-software access: exactly the credentials invoice-fraud attackers target. For a cloud-based practice, cyber cover arguably rivals PI in importance.
Also: public liability if clients visit or you work on their premises (cheap to add), employers' liability with any staff (legal requirement), business equipment, and legal expenses/tax-investigation options. Note: bookkeepers providing services by way of business must be supervised for anti-money-laundering purposes (via a body or HMRC) – not insurance, but the same compliance conversation.
How much does it cost?
Bookkeeping sits in accountancy's lowest risk tier, and pricing reflects it: entry points from around £5–£7/month (Markel from £5/month; Simply Business PI from £6.62/month with 10% of customers paying £79.41/year or less; AXA from £66/year), and a typical sole-practice bookkeeper with £100k–£250k of PI plus extras lands around £80–£200/year. Drivers: fee income, whether you stray into tax advice or management accounts (which rate higher), and claims history.
Comparison of providers
| Provider | Type | From | Notable features |
|---|---|---|---|
| Simply Business | Broker/comparison | £6.62/mo | Multi-insurer PI comparison; easy add-ons; 4.2 Trustpilot |
| Markel Direct | Direct insurer | £5/mo | Strong wording + legal helpline; 4.7 Feefo |
| AXA | Direct insurer | £66/yr | Household name; clear PI options to £5m |
| PolicyBee | Broker | quote-based | Explicitly documents AAT requirements; weak/thin Trustpilot profile noted |
| ICB/AAT member routes | Association schemes | varies | Cover arranged around your body's licence terms – check current partners |
| Superscript | Digital broker | quote-based | Flexible monthly cover; 4.5 Trustpilot |
Which route suits whom? Licensed bookkeepers: confirm any-one-claim basis and your body's floor before buying – the direct market handles this fine at this risk level. Cloud-heavy practices: prioritise the cyber add-on. Bookkeepers drifting into tax returns or management accounts: declare it; it's a different rating.
Reviews and expert ratings
Superscript 4.5/5 Trustpilot; AXA 4.3; Simply Business 4.2; Markel 4.0 (4.7 Feefo). Which?/Fairer Finance: no ratings for this niche.
Key takeaway
Buy PI at your body's formula (or £100k+ if unregulated), on an any-one-claim basis, and be honest about scope creep into tax work. Then take the cyber question seriously – for a modern bookkeeping practice, the likeliest bad day isn't a negligence claim but a compromised inbox and a client's redirected payment.
Sources
- policybee.co.uk/accountants-insurance (AAT formulas)
- simplybusiness.co.uk/business-insurance/professional-indemnity-insurance/ (pricing floor)
- markeluk.com; axa.co.uk (PI pricing)
- icpa.org.uk (body requirements overview)