ACCA Member in Practice: Mandatory Insurance Coverage Explained

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• Update the policy promptly if you change your address, as the postcode affects the risk assessment.
• Add or remove drivers from the policy as circumstances change to avoid coverage issues.
• Cancel the policy correctly through the insurer if selling or scrapping the vehicle; do not just let it lapse.
• Be aware of cooling-off periods and cancellation fees when taking out or ending a policy.
• Review the policy annually at renewal to ensure it still meets your needs and remains competitive.
• Compare quotes from different insurers to ensure you are getting suitable coverage at a fair price.

Tailored insurance designed to fit the firm Policy wordings vary, but certain protections are core to professional indemnity insurance for Accountants.

• Keep proof of insurance accessible, either in physical or digital form, for presentation to authorities.
• Ensure all named drivers on the policy are disclosed and meet the insurer's eligibility criteria.
• Pay insurance premiums on time to avoid policy lapse and potential legal penalties.
• Understand the policy's territorial limits and ensure coverage applies for where you drive.

Cover for the financial compensation you have to pay if you made an error, omission or gave negligent advice in the course of your professional services.

Practising certificate

Beyond regulatory hygiene, be clear about what matters most to your clients and how they operate. Each one is different, so you need access to a range of products that can be tailored to your customers’ needs. Look for comprehensive products that are simple and quick to arrange. At Aqueous, quoting and binding on our e-trade platform can take less than five minutes, with experienced underwriters on hand to give you all the information you need. All our products are underwritten by A-rated (or above) insurers, meaning bet betting promos uk quality and reliability is guaranteed.

11.3 Aggregate versus any-one-claim

Each product has been carefully designed to cover the risks faced by specific professions, based on our experience of the market. A comprehensive PI policy is an effective and efficient way to manage risk. As time-pressed business owners, your clients want to get the right cover without hassle or fuss. At Aqueous, we pride ourselves on the human touch. Professional underwriters offer personal attention and are always available if you need to discuss a policy.

What work is considered high risk?

Why not get in touch with Aqueous today to discuss your clients’ needs? – Authored by Stuart Barker, Head of Business Development – Professional Indemnity Since 2011 we have been arranging tailored professional indemnity insurance for Accountants. We have a specialist knowledge of the professional indemnity market and offer a range of services to help established and new-start Accountants obtain their cover quickly and at a competitive premium. With at least 45 insurance companies on the current ICAEW list of Participating Insurers there's plenty of competition available, which is why thousands of Accountancy firms already arrange their professional indemnity insurance with these companies. We have a dedicated team looking after the PI interests of many Accountancy firms throughout the UK. Your legal defence costs including solicitors, counsel, experts and court fees. Cover for breach of professional duty or unintentional breach of contract where this leads to a claim for financial loss against you.

What Services Do You Provide?

Select a broker to help you secure insurance and advise them who our qualifying insurers are. Decide whether the minimum level of cover of £2 million is sufficient. Complete the Professional Indemnity Application Form once, which can then be used with all our qualifying insurers. Once you have agreed a quote, do not put the cover on risk until you have received provisional authorisation. Once you have received provisional authorisation, put your PII on risk and arrange for a copy of the insurance certificate to be sent to us.

1.2 Reliance by third parties

The links to the left will help you obtain your PII. We recommend that you instruct a broker to help you secure insurance. Our Buyers’ Guide to Professional Indemnity on the left-hand side of this page provides you with further information on instructing a broker. Under our Rules, PII cover must be obtained from a qualifying insurer. A qualifying insurer is an insurer that: Is authorised and regulated to conduct insurance business in the UK by the Financial Conduct Authority (FCA) Has a credit rating from AM Best of at least B+ or, Standards & Poor’s rating of at least Category BBB (CILEx Regulation does not undertake any additional steps to regulate, vet or approve qualifying insurers) Has signed the CILEx Qualifying Insurers Agreement We provide a list of qualifying insurers which can be found on the left-hand side of this page The minimum level of cover is £2 million and applies regardless of the actual wording of the policies.

Technology and IT Companies

The minimum level of cover is contained within the Qualifying Insurers Agreement (QIA). Each of our insurers sign up to the QIA, which requires qualifying insurers to offer a level of cover which should meet the CILEx Minimum Wording (found on the left-hand side of this page) What if £2 million is not enough? The minimum level of cover you are required to take is for £2 million however the total amount of PII you need will depend on the size of your entity and exposure to risk. You should seek advice from your broker and/or insurer to ensure that you have a sufficient level of cover for your entity. You must not exclude or attempt to exclude liability below the minimum level of cover of £2 million. Professional indemnity claims against Accountants range from hundreds to millions of pounds.

Do You Have a Legal Requirement to Have Professional Indemnity Insurance?

If you seek to limit your liability to a level above the minimum level of cover, the limitation should be set out in writing and you should bring it to your client’s attention. How do I inform consumers about my PII? There are two specific rules that require our Authorised Entities to inform consumers that they have Professional Indemnity Insurance. The Regulations require that you provide clients with information about the insurance you have in place including the contact details for the insurer and the territorial coverage of the insurance. You have a choice of four methods by which to make this information available to your client: You provide your clients with such information on your own initiative You make it easily available to your clients at the place where you provide the service by displaying your certificate, or where the contract for the service is concluded You make it easily available to your client electronically (for example, on your website) Make it available in any information document you supply to your client in which you give a detailed description of the service The CILEx Regulation Transparency Rules (Transparency Rules) state that you are required to have Professional Indemnity Insurance (PII) to cover all legal services you provide, and it must be clear which legal services are covered by your PII.

Public liability insurance for accountants

As consumers assume all legal service providers are regulated, although they are not, you can emphasise your firms regulated status by emphasising the benefits of professional standards and consumer protections offered by PII and possible access to the CILEX Compensation Arrangements. Full details can bet betting deals new customer be found at the Price and Service Transparency section of our website. It’s not easy running an SME in 2023. You know it, we know it, and accountancy business owners certainly know it. From rising costs to fierce competition for customers, it’s no wonder insurance sometimes gets pushed to the bottom of the pile.

15.5 Bonding versus PI — the line in practice

But every SME needs a safety net. Just look at the stats: BIBA data suggests nearly one in five businesses suffer a major disruption every year. For smaller companies, even the slightest mistake or bad luck can leave it struggling to survive. This is why having fit-for-purpose professional indemnity (PI) insurance makes so much sense. With 26% of the annual total insurance claims in the UK relating to professional indemnity issues, it helps accountancy firms manage risk, and ultimately helps protect the business if an error should occur. Claims can arise from many different scenarios but key areas of risk include ; Misleading or inaccurate advice such as poor tax advice, recommendations or advice on business valuations that leads to quantifiable financial losses. Failure to detect fraud as an auditor to a company.

• Choose an appropriate level of cover: Third-Party Only (TPO), Third-Party Fire and Theft (TPFT), or Comprehensive.
• Consider optional add-ons like breakdown cover, legal expenses insurance, or courtesy car provision.
• Review the policy excess amounts (compulsory and voluntary) and ensure they are affordable.
• Check if the policy includes coverage for personal belongings or audio equipment.

Loss of documents or data in the accountant’s care including the costs of restoring or replacing them and associated client loss where covered.

Certain civil liabilities such as defamation, unintentional breach of confidentiality or intellectual property rights, in the course of providing professional services.

What the insurer underwrites on

Whilst it is not a legal requirement for accountants to take out PI insurance, for many accountants (such as members of the ICAEW, ICAS or ACCA) it is a regulatory requirement to buy PI cover that complies with the respective association rules. These rules can not only set out the limits required, but also mandate the specification of the wording and the Insurers that can be used. For those “unregulated” firms, PI cover is still arguably a business necessity to provide the firm with the requisite legal expertise and financial resources to ensure the stability of their business should the worst happen. With PI cover, mistakes can be sorted out quickly and easily, with minimum disruption and expense. Even if it’s never used, having PI insurance provides reassurance for clients, giving them one more reason to trust an accountant with their finances.

What Factors Affect the Cost of PI Insurance?

Within a heightened regulatory environment, the combination of more intervention and evolving standards means an increase in the number of claims. Here are four scenarios where PI Insurance has helped an SME accountant faced with a claim… An accountancy firm fails to comply with HMRC filing deadlines resulting in penalties for the client. An accountant fails to warn a client that the transfer of shares prior to the sale of a business will trigger a CGT charge. A complex claim as the client may not have warned the accountant of their intentions. An accountancy firm acting as auditors for a client fails to detect fraudulent activity in an investment opportunity.

4.5 Run-off

A complex case as the wrong doer will have gone out of their way to cover their tracks. An accountant uses third-party information to research the latest tax insights. Taking the information at face value, they give the wrong advice leading to losses for the client. Be aware of the regulatory status of your client and the impact of this on the limits and cover you need to recommend and the markets you can and cannot approach. The primary capacity that Aqueous have secured is all fully compliant with the necessary accounts regulatory bodies. Professional indemnity insurance for an Accounting firm is best obtained through a specialist broker.