Accountancy professional indemnity insurance is underwritten on the mix of work a practice does rather than on its size alone. Compliance work produces frequent small claims; advisory work produces rare large ones, and a practice that has drifted towards the second without revisiting its limit is the classic underinsurance case.
The mix, not the headcount
Bookkeeping, payroll and returns sit at one end. Audit, tax planning, corporate finance, valuations and insolvency at the other. Insurers ask for the split because the claims records differ sharply, and a practice that describes itself generically is quoted for the worst assumption its insurer can make.
What the institutes require
Professional indemnity on minimum terms as a condition of a practising certificate, with a limit linked to gross fee income and a floor beneath it, criteria for the insurer, a cap on the excess and a run off requirement after closure. Buy to the specification rather than to a price.
Revisiting the limit
Income grows, the mix shifts, and the required limit moves with both. A practice recalculating once a year at renewal is doing the minimum; one that recalculates after winning a materially larger client is doing it properly.
Questions people ask about accountancy professional indemnity insurance
What decides the premium?
The mix of work above everything else. Advisory, audit and corporate finance price very differently from compliance work.
How is the required limit set?
Generally from gross fee income with a floor for small practices, on the formula your institute publishes.
Can I use any insurer?
The minimum terms usually set criteria the insurer must meet, so the cheapest market wording may not satisfy the obligation.