Professional Indemnity Insurance for Accountants

Compare Professional Indemnity Insurance for Accountancy  

If you’re a financial advisor or chartered accountant, accountancy professional indemnity insurance (PII) can be a lifesaver. Let’s face it, even the sharpest minds can have a slip-up. In the accounting world, a small error can lead to big problems. That’s where this type of insurance comes into play, acting like a financial safety net, catching you and your firm if things go wrong. Whether it’s a misplaced decimal point or an oversight in tax legislation, professional indemnity insurance for accountants keeps you covered. It’s about peace of mind. It also lets you focus on what you do best: navigating the complex world of finance with confidence and precision. 

What does accountant’s professional indemnity insurance cover? 

Professional indemnity insurance for accountancy firms safeguards you against claims made by clients. This is typically for losses they’ve incurred because of advice or services you’ve provided. Imagine a slip-up in tax advice. Perhaps a financial oversight. This insurance is there to cover the legal costs and potential compensation payments, keeping your firm’s financial health in check. 

What kinds of things are usually excluded from accountant’s professional indemnity coverage? 

Your professional indemnity insurance for accountants won’t cover everything. Common exclusions can include:  

• Any intentional wrongdoing or fraudulent acts. 
• Claims arising from known circumstances before the policy started. 
• Liabilities assumed under a contract that goes beyond the standard duty of care. 

It’s about covering the unforeseen, not the deliberate or the already known. 

Is professional indemnity insurance legal requirement for accounting firms in the UK? 

Accountants are among some of the professionals that require professional indemnity insurance in the UK. It will also be required to become a member of a professional body such as the ICAEW or ACCA. These bodies set minimum levels of cover to maintain standards and protect both the profession and the public. 

Is it true the ICAEW and the ACCA will insist that I have this insurance? 

Absolutely, both the ICAEW and ACCA require their members to have professional indemnity insurance for accountancy. It’s not just about following the rules; it’s about assurance. Having this cover means you’re not just protecting yourself but also offering peace of mind to your clients.  

What’s the best way to compare accountancy professional indemnity insurance? 

The best way to sift through options for accountancy professional indemnity insurance is by using a comparison platform like ours. Our comparison website is ideal for helping accountants find the right cover. By putting in a few details about your firm, you can compare accountancy professional indemnity insurance quotes from a range of insurers, making it easier to choose the deal that suits you. 

Is accountancy insurance suitable for small firms? 

Professional indemnity insurance for accountants is not just for the big players. Even if you’re running a smaller firm, this insurance is key. It’s all about protecting your business from claims of errors or negligence, which can happen to any size of the firm. In short, if you’re in the business of giving advice or providing a professional service, this cover is a smart choice. 

Does the size of my accountancy firm have a big impact on the cost of this policy? 

The size of your accountancy firm can influence the cost of professional indemnity insurance for accountancy firms. Generally, the larger your firm, the higher the potential risk of claims, which can increase the price. But it’s not just about size. Insurers also consider factors like the types of services you offer, your clients, and your claims history.  

How much does professional indemnity insurance for accountants cost, on average? 

Determining an average cost for professional indemnity insurance for accountants is rather difficult. Premiums vary widely based on several factors. These include: 

• Your firm’s size 
• The scope of your services 
• Your turnover 
• Your claims history.  

Typically, smaller practices might see lower costs, but it is a matter of your specific details. 

If I’m a very experienced accountant will this policy be cheaper than it would be if I was newly qualified? 

Experience does have its perks, and one of them could be more favourable rates on your professional indemnity insurance for accountants. Here’s why: 

• Risk Assessment – Insurers often view experienced accountants as lower risk, thanks to a track record of professionalism and fewer claims. 
• Demonstrated Expertise – A history of expertise can translate to lower chances of errors that lead to claims, making you a safer bet for insurers. 

So yes, your years of experience could well work in your favour when it comes to insurance premiums. 

If my firm has claimed on a professional indemnity insurance policy in the past will that affect the cost of this particular policy? 

Past claims can influence the cost of your accountancy professional indemnity insurance, and here’s how it works: 
 

• Claim History – Insurers see a history of claims as indicative of future risks, potentially leading to higher premiums. 
• Nature and Frequency – The specifics of past claims, including their nature and frequency, are scrutinised to assess risk levels. 
• Risk Management Measures – Implementing measures to mitigate future risks can help balance out the impact of past claims on your premiums. 

While a history of claims might raise costs, demonstrating a commitment to risk management can help offset some of this impact. 

What other risk factors might influence the cost? 

When it comes to accountancy professional indemnity insurance, a few key risk factors beyond the basics can influence the cost. Here’s a look at what might affect your premium: 

• Type of accounting services - Some areas, like forensic accounting, carry more risk and, therefore, might raise the price. 
• Client industries served – High-risk sectors mean higher premiums. If your clientele includes businesses in volatile industries, insurers might see this as riskier. 
• Policy limits and deductibles - Higher coverage limits and lower deductibles can increase the premium, but they also offer more protection. It’s all about finding a compromise. 
• Geographical location - Where your firm operates can influence the cost too. Bigger cities might see higher rates due to increased risks of claims. 

Understanding these factors can help you navigate the ins and outs of your premium and possibly work towards lowering costs where you can. 

Can I bundle other types of insurance like employers’ liability cover and public liability cover with this professional indemnity insurance? 

Bundling is totally possible and often encouraged. When it comes to professional indemnity insurance for accountancy firms, combining other overs can streamline your insurance dealings and might even secure you a discount. Consider adding: 

• Employers’ liability insurance - Non-negotiable if you have staff, as it covers claims from employees for injuries or illness caused by work. It’s a legal requirement. 
• Public liability insurance – Shields you from claims made by the public for injury or damage due to your business activities. 
• Cyber insurance – Protects against unauthorised IT system access or attacks.  
• Commercial property insurance – Protects your business building and can include contents too.  

Bundling these with your accountancy indemnity insurance could make your insurance experience smoother and more cost-effective. It’s a smart approach to ensuring your firm is comprehensively covered. Plus, managing one policy is easier than dealing with several.