Why do accountants need insurance?
A costly miscalculation
If you file accounts with HM Revenue and Customs and a miscalculation means thousands of pounds aren’t accounted for, your client could find themselves facing a larger-than-expected tax bill. If this happens, they may blame you and take legal action to reclaim the lost money. For an accountant, Hiscox business cover can be tailored to include professional indemnity insurance, which helps with the cost of defending and settling the case. It’s welcome protection, whether your accountancy firm makes a mistake or faces false accusations.
Thieves break-in to your office
Your accountancy practice’s office is kitted out with the latest laptops and touchscreen monitors as well as audio and camera equipment for remote calls with clients. When a gang of thieves break-in to the offices overnight and make off with the tech, you’re left struggling to service your clients. Business contents insurance can help to pay for replacement items so you can get back up and running.
Because professional bodies require it
Accountants who join industry organisations such as the ICAEW or ACCA are required to have a certain level of professional indemnity cover to meet each organisation’s membership rules. At Hiscox, we offer cover levels that meet the minimum requirements of such bodies. As you gain more professional qualifications and industry expertise, you may offer additional services. Thankfully, your Hiscox policy can grow with you – we also offer a policy wording that is compliant with the ICAEW minimum terms for Chartered Accountants.
What insurance is available for accountants?
Office insurance
With an office insurance package from Hiscox, you can combine several property-focused covers. Start with business contents insurance to protect your offices against damage caused by flood or fire or from losses incurred after a break-in. Add portable equipment insurance to protect items like laptops and smartphones when used away from your offices. And, if you own the building, commercial property (buildings) insurance can cover the bricks and mortar.
Note: to add any of the other covers you must first take out business contents insurance.
Employers’ liability insurance
Employers’ liability insurance can offerprotection against claims made against you by employees who have had an accident or fallen ill as a result of their work. For example, if one of your accountants claims you’vefailed to support them with work-related stress. Note that employers’ liability insurance can be required by law (external link) for any business that employs others. You can be fined up to £2,500 for every day you are not covered.
Professional indemnity insurance
Professional indemnity insurance is compulsory for members of accounting organisations like ACCA and ICAEW. PI cover can help to protect you against the cost of legal action if a client claims they lost money or suffered reputational damage as a result of your work, professional services or advice. Whether you’re settling or defending a claim, you can addlegal fee protection when you take out this insurance, too.Furthermore, in some circumstances, professional indemnity insurance for chartered accountantscan be mandatory.
Each business is unique – some accountants may also choose to have public liability insurance.
These are just some of the types of business insurance for accountants that we can offer. We can provide other specific types of cover and build them into a policy that’s tailored to the exact needs of your business.
Get your quoteInsurance for accountants: FAQs
What’s included in Hiscox professional indemnity insurance for chartered accountants?
Hiscox professional indemnity insurance is relevant to many complaints an accountant can face. It can help to cover allegations of negligence, accidental breach of confidence and giving poor business advice.
Should you provide good-faith tax guidance which turns out to be misplaced, we may help to pay related legal fees and compensation. Likewise, if your cashflow forecasts turn out to be incorrect and a client sues, insurance can help with the aftermath.
Our professional indemnity insurance can also be suitable for tax accountants and company registrars as well as auditing and payroll professionals. This means a wide range of industry activities, from filing to invoicing, are covered.
Do accountants need public liability insurance?
Every business entity is liable to members of the public for injuries or property damage that might occur because of its activities. Public liability insurance is designed to help absorb the cost of such cases.
Many businesses can face public liability claims, even if they aren’t public-facing – for instance, an office sign could fall from a commercial building. However, public liability insurance might be more relevant to businesses with frequent client interactions.
Is professional indemnity insurance mandatory for chartered accountants?
The organisations that facilitate the training and qualification of chartered accountants in the UK and globally will set the rules for their members’ professional indemnity requirements, and this will often include minimum limits for members to have in place for their business. The two main bodies for chartered accountants are ACCA and ICAEW.
- ACCA and professional indemnity insurance
ACCA (external link) is a global organisation for professional accountants. To become a member of the organisation and an ACCA chartered accountant, you must take and pass the ACCA Qualification. As a member, you are required to have professional indemnity insurance.
- ICAEW and professional indemnity insurance
The ICAEW (external link) is the only body in the UK that publishes minimum terms for the Professional Indemnity coverage it requires its chartered members to have. Hiscox has a Chartered Accountant policy wording that meets all the ICAEW minimum terms requirements.
Other professional bodies that ask for their members to have PI cover include:
Hiscox accountants’ insurance is comprehensive and flexible, so you can tailor the cover to meet the requirements of your professional body.
Meet our experts
“With 20 years in the industry, I am a professional indemnity insurance specialist. I champion keeping our policy wordings as ‘plain English’ as possible and stamping out unnecessary jargon. Clarity is key when talking to customers about their professional indemnity cover.”
- Liam Barry, PI Underwriting Manager (Emerging and Traditional)
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