Professional indemnity insurance (PII) covers accountants against claims of professional negligence, errors in advice, or failures that cause a client financial loss. It is a mandatory requirement for all practising members of ICAEW, ACCA, AAT, and most other professional bodies. Most sole practitioners pay between £200 and £800 per year.
What professional indemnity insurance covers
- Claims arising from negligent advice or services
- Errors or omissions in accounts, tax returns, or financial statements
- Breach of confidentiality or data protection failures (often with limits)
- Legal defence costs if a claim is made against you
- Court awards and settlements up to your policy limit
PII does not typically cover deliberate wrongdoing, criminal acts, or general business liabilities (for which you would need public liability insurance separately).
How much cover do you need?
| Practice size | Recommended minimum cover | Typical ICAEW requirement |
|---|---|---|
| Sole practitioner, turnover < £100k | £250,000 | £100,000 minimum |
| Small firm, turnover £100k to £500k | £500,000 to £1m | Based on highest-risk client |
| Medium firm, turnover £500k to £2m | £1m to £2m | Proportionate to client base |
| Any practice handling client money | £1m+ | Additional requirements apply |
Your professional body may set a minimum indemnity level. Check your body's practising regulations before choosing a policy.
Where to get PII for accountants
Specialist professional indemnity insurers for accountants include:
- Howden Group (formerly COBRA)
- PolicyBee (online quotes, good for sole practitioners)
- Hiscox
- Markel
- Zurich
ICAEW and ACCA both operate preferred supplier schemes that can offer competitive rates for members.
What affects your premium?
- Annual fee income and practice turnover
- Services offered (audit, investment advice, and insolvency carry higher risk)
- Claims history (previous claims significantly increase premiums)
- Client profile (high-value clients or complex work costs more to insure)
- Level of cover selected
Most PII for accountants is written on a "claims-made" basis, meaning the policy in force when the claim is made covers it, not the policy in force when the work was done. This means you should maintain continuous cover and run-off cover when you close your practice.