PI requirements · AAT · As at September 2026

AAT licensed members’ PI insurance requirements

AAT licensed members must hold PI insurance as a condition of the licence, with a minimum set by structure and fee income. Here is the current requirement, the basis, the run-off recommendation, and how to judge whether it is enough.

Part of: PI insurance requirements by professional body

In short

AAT licensed members must hold professional indemnity insurance as a condition of their licence, on a full-civil-liability, fully retroactive basis. The minimum limit of indemnity is the greater of 2.5 times gross fee income or £50,000 for a sole trader, and the greater of 2.5 times gross fee income or £100,000 for a partnership or limited company. Where gross fee income is above £400,000 the required cover is capped at £1 million. AAT recommends keeping cover for at least six years after you stop. These figures are the position as at September 2026; verify the current requirement with AAT. Apex is an independent, director-owned broker that checks the basis and limit, and returns competing quotes.

What AAT requires

AAT licensed members — accountants and bookkeepers in practice under an AAT licence — must hold professional indemnity insurance as a condition of the licence. The minimum limit of indemnity depends on the firm’s structure and gross fee income:

Sole traders: the greater of 2.5 times gross fee income or £50,000.
Partnerships and limited companies: the greater of 2.5 times gross fee income or £100,000.

Where gross fee income is above £400,000, the required cover is capped at £1 million (2.5 × £400,000). The policy must provide full civil liability cover and be fully retroactive, so it responds to work done before the current policy year back to the retroactive date.

Rule and date. AAT professional indemnity insurance requirements, a condition of the AAT licence — the 2.5× fee-income formula with the £50,000 sole-trader and £100,000 firm floors, the £1 million cap above £400,000 fee income, the full-civil-liability and fully-retroactive basis, and the six-year run-off recommendation. As at September 2026 — verify the current requirement with AAT (AAT PII requirements), as these requirements change.

Each claim vs aggregate: why the basis matters

Two policies can both say ‘£2 million’ and protect you very differently. The difference is the basis of the limit.

Each and every claim (or ‘any one claim’). The full limit is available for every separate claim, however many you face in a policy year. A firm on a £1 million each-and-every policy is covered for three £1 million claims in the same year.
In the aggregate. The limit is the most the insurer will pay in total across the whole year, added together. On a £1 million aggregate policy, those same three claims exhaust the cover after the first.

AAT requires full civil liability cover on a fully retroactive basis, so the policy responds to work done before the current policy year, back to the retroactive date. Whatever the limit, that retroactive date is what keeps your earlier work covered, so it is the point to protect if you change insurer.

This is why a firm holding £1 million in the aggregate can still fail a requirement written as ‘£1 million for any one claim’ — the number matches but the basis does not. Read the basis of your requirement, not just the figure, and check whether defence costs sit outside the limit or erode it.

Run-off: cover after you stop

Professional indemnity is written on a claims-made basis: the policy that answers a claim is the one in force when the claim is made or notified, not the one you held when you did the work. So when you stop trading, the cover does not follow your old work automatically — a claim can still arrive years later, and there is no live policy to meet it unless you have bought run-off cover.

AAT recommends maintaining cover for a minimum of six years after you stop practising. This is a strong recommendation rather than a stated mandate, but the claims-made nature of PI makes it the sensible course.

Run-off matters most on retirement, closure, a merger or a change of legal structure. A retroactive date that reaches back over all your past work is what keeps that earlier work covered; if you change insurer or broker, protecting that date is the point to watch.

Is the minimum enough?

A regulatory minimum is a floor, not a recommendation. AAT sets the least cover you may hold and still practise; it does not promise the figure is enough for your work. A single claim on a large contract, a valuation, a set of accounts or a piece of advice can run well past the minimum once the loss and the other side’s legal costs are added.

The £50,000 and £100,000 floors suit the smallest practices; as fee income grows the 2.5 times formula raises the minimum up to the £1 million cap, but a single error on a client’s tax or accounts can still exceed it.

Judge the limit against your own exposure: the size of the contracts you sign, the value of the work you touch, what your clients and their lenders require in writing, and your claims history. Our minimum-limit calculator and our guide to how much professional indemnity insurance you need walk through that. A broker’s job is to place the right limit, not just the lowest one you are allowed to buy.

How Apex helps you meet it

Apex Insurance Brokers is an independent insurance broker established in 2009 and based in Bristol, owned entirely by its directors and directly authorised by the FCA since 2016, placing professional indemnity insurance for accountants and bookkeepers across the UK. It is one of the longest-established independently owned professional indemnity specialists in the UK, and it is not for sale: we have declined approaches to buy the firm. We are not tied to any single insurer or professional-body scheme, we do not run our own policy or underwriting, and we have no placement quotas. We have access to over 30 markets, including Lloyd’s syndicates via wholesale, and we usually return three or four competing quotes set out so you can compare them like for like. Every client has a named broker — the same person from first quote to renewal — and every claim notification gets director-level attention rather than a call-centre queue.

Owned by its directors, not for sale. No consolidator, no private-equity owner, no external shareholders — and we have declined approaches to buy the firm. Read the Apex Independence Charter.
Independent, not tied. No single-insurer scheme, no in-house policy, no placement quotas — the recommendation is the one that fits, not the one we are paid to push.
Over 30 markets, including Lloyd’s. Specialist UK PI insurers and Lloyd’s syndicates via wholesale, so a risk that one underwriter dislikes can still be placed properly with another.
Usually three or four competing quotes, laid out side by side — limit, excess, retroactive date, exclusions and premium — with a plain-language note on the trade-offs.
The stay-put letter. If your existing cover is right, we say so in writing, free and without obligation. How the stay-put letter works.
A named broker all year. The person who places your cover is the person who picks up the phone at renewal, on a mid-term change, or when a letter of claim lands.
Director-level attention on claims. We help you notify circumstances early and in the right form, stay involved once the insurer’s panel solicitors are appointed, and tell you plainly where you stand.
Directly authorised by the FCA since 2016, not an appointed representative trading under someone else’s permissions.

Frequently asked

What is the minimum PI insurance for an AAT licensed member?

It depends on your structure and fee income. A sole trader needs the greater of 2.5 times gross fee income or £50,000; a partnership or limited company needs the greater of 2.5 times gross fee income or £100,000. Above £400,000 fee income the requirement is capped at £1 million. This is the position as at September 2026; confirm it with AAT.

Why is the sole-trader floor lower than the firm floor?

AAT sets a £50,000 floor for sole traders and a £100,000 floor for partnerships and limited companies, reflecting the typically larger exposure of a firm. Above those floors the same 2.5-times-fee-income formula applies to both, up to the £1 million cap that takes effect once fee income passes £400,000.

Is the AAT cover per claim or in aggregate?

AAT requires full civil liability cover on a fully retroactive basis rather than specifying a per-claim or aggregate structure in the headline requirement. What matters is that the policy is full civil liability, is fully retroactive to cover earlier work, and meets the minimum limit. Check the basis on your schedule, and ask a broker if it is unclear.

Do AAT members need run-off cover, and for how long?

AAT strongly recommends keeping cover for at least six years after you stop practising. It is framed as a recommendation rather than a mandate, but professional indemnity is claims-made, so a claim about past work can arrive after you close, and run-off is the live policy that answers it. Six years is the sensible minimum.

What if I am also regulated by another body?

You must meet the highest applicable requirement. An AAT member who is also, say, ACCA-regulated or doing separately regulated work meets whichever minimum is higher and ensures the wording covers all the activities. Holding more than one licence does not mean you can hold the lower limit; a broker checks the cover satisfies each.

Is the AAT minimum enough?

It is a floor. The £50,000 and £100,000 figures suit the smallest practices, and even at the £1 million cap a single error on a client’s tax return or accounts can exceed the cover once loss and costs are added. Our calculator and how-much guide help you judge the right limit for your practice.

Who checks that I comply?

AAT, as part of your licence. Licensed members confirm they hold conforming PII and must be able to evidence it; the cover has to be full civil liability, fully retroactive, and meet the minimum limit for your structure and fee income. Practising without compliant cover breaches your licence conditions.

Check your cover meets the minimum

Send your current schedule and renewal terms. A named Apex broker checks the limit, basis and run-off against your body’s requirement and returns competing quotes set out so you can compare them like for like. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about professional indemnity insurance requirements, not advice on your individual circumstances, and it does not set, guarantee or replace the rules of any professional body or regulator. Every requirement shown is the position as at September 2026 against the source linked beside it; these requirements change, so confirm the current rule with the body itself before you rely on it. Apex does not set or enforce any professional body’s minimum.