The Institute of Chartered Accountants in England and Wales (ICAEW) new Professional Indemnity Insurance (PII) limits and regulations apply from 1 September 2024. The changes follow last year's review by its Professional Indemnity Insurance Committee (PIIC).
PII is compulsory for all members of ICAEW who have a practising certificate and are engaged in public practice, regardless of the amount of practice income. Due to the rising cost of claims, the ICAEWv felt that a reassessment of the insurance levels and risk audits was appropriate.
In conjunction with the ICEAW's PIIC, a consultation with members took place between October and December last year with new rules resulting. The ICAEW has also been in contact with the insurance sector to discuss the new rules and holds approved lists.
The ICAEW has released this summary of the new rules and levels.
| Summary of the main changes | Regulation |
| Generally, firms will be required to have a £2m limit for any single claim and in the aggregate. | 3.2 |
| For firms with less than £800k in fee income, the minimum limit will be equal to two and a half times its gross fee income, with a minimum of £250,000 (an increase from £100k). | 3.3 |
| If a firm’s gross fee income is over £50m they will not be required to put in place qualifying insurance, but will need to have in place appropriate arrangements to ensure they are able to meet claims arising from being in public practice. | New- 3.8 and 2.5 |
| For firms required to put in place qualifying insurance, the maximum permitted aggregate excess will not exceed the higher of £3,000 or 3% of a firm’s fee income. | 3.7 |
| Firms insuring in a group arrangement can be treated as a single entity for the purposes of the PII Regulations providing that they meet certain criteria. | New- 3.9 |
| Members and firms should use ‘all reasonable steps’ to put in place run-off cover. Firms are still required to have cover for two years, they then must take all reasonable steps to ensure cover is in place for a further four years. | 2.7 and 2.8 |
| The guidance relating to dispensations has been updated and a fee will be introduced for firms making an application. | 5.3 and Appendix B |
| The regulations and guidance have been reviewed and updated generally to ensure they are clear and easier to understand. | All |
The new regulations are published subject to approval by the Legal Services Board.
If you are unsure about any aspect of the compliance of your policy, you can also get in touch with the ICAEW's technical advice line on +44 (0) 1908 248 250.
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External links
List of ICAEW participating insurers
ICAEW: Read the Professional Indemnity Insurance Regulations, effective from 1 September 2024
