Changing PI insurance broker: bookkeepers
Why bookkeepers end up switching broker
Bookkeeping practices are often sold a small package policy early on and then left alone. Years later the practice has grown, taken on payroll, moved clients onto cloud software and started filing under Making Tax Digital, and the policy has simply renewed unchanged. When questions go unanswered and renewal is a lapse-and-hope letter rather than a conversation, looking for a broker who understands the work is a reasonable response.
Professional body requirements sit underneath this. AAT licensed members are required to hold professional indemnity insurance, and the Institute of Certified Bookkeepers requires members in practice to hold PI as a condition of their practice licence. Whatever new arrangement a broker proposes has to keep you on the right side of your body’s published requirements.
As with any profession, changing broker is not the same as changing insurer. A new broker might improve the service around your existing policy, re-market it, or both. The test is whether the advice gets better.
Continuity: the part you cannot get back
PI is claims-made: the policy that responds is the one in force when the claim arrives, not when the ledgers were posted. A client can discover a problem in records you kept two or three years ago, and it is the current policy that deals with the complaint.
That is why the two fixed rules of switching are continuity and the retroactive date. There must be no gap, even a weekend, between the old policy ending and the new one starting, and the new policy must carry the same retroactive date as the old. Work done before the retroactive date is not covered, so a reset quietly uninsures your practice’s past. Ask for written confirmation of both before the old policy is allowed to lapse.
Describing the modern practice honestly
The proposal form for the new policy is where switches go wrong quietly. Bookkeeping has changed: bank feeds, automated coding, quarterly digital filing, client payrolls, CIS returns, VAT. If the activity description on the new policy still says “bookkeeping services” as it did a decade ago, work outside that description may not be covered at all.
Software work deserves particular care. Errors arising from a misconfigured bank feed, a bad software migration or an automated coding rule left unchecked are realistic exposures for a digital practice, and the insurer needs to know the tools and services involved. Declare MTD filing work, the payroll headcount you process, and any advisory services you have drifted into, so the wording is built around the practice you run today.
Honesty here is not just prudence. A fair presentation of the risk is your legal duty under the Insurance Act 2015, and it is what makes the policy dependable when a claim comes.
Timing the move
Renewal is the simple switching point: the old policy completes, the new one starts, and there is nothing to unwind. If you are unhappy mid-term, a letter of appointment can move the servicing of your current policy to a new broker immediately, with a proper re-market to follow at renewal. Cancelling a policy mid-term to restart elsewhere rarely makes sense for a small practice.
Allow a few weeks. A broker quoting a bookkeeping practice properly will want the activity split, client mix, software list and claims history before approaching insurers, and terms produced from a complete picture are worth more than terms produced overnight.
What to have ready for the new broker
Your current schedule and wording, with the limit, excess and retroactive date. Your claims and circumstances history, including anything notified that came to nothing. A short description of the practice: number of clients, the split between bookkeeping, payroll, VAT and other filings, software used, and whether any work strays toward tax advice. If you have signed engagement letters or contracts that promise a particular level of cover, bring those too.
With that in hand, comparing quotes is straightforward: limit and basis, excess, retroactive date, activity description, exclusions, and the service that surrounds the policy. Premium matters, but it is the last item on the list for a reason.
Frequently asked questions
Will changing broker put my AAT licence or ICB practice licence at risk?
Not if the new cover continues to meet your body’s published PI requirements. Tell the new broker which body licenses your practice at the start, so the recommended policy is checked against those requirements before your existing cover is allowed to end.
What happens to claims about old bookkeeping work after I switch?
Under a claims-made policy, a claim about past work is handled by the policy in force when the claim is made. Provided your cover is continuous and the retroactive date is preserved, a claim about work done years ago remains covered under the new arrangement.
Do I need to tell the new insurer about MTD and software work?
Yes. The activity description on the new policy should reflect the practice as it is now, including digital filing, payroll, and the software you use. Errors connected to bank feeds, migrations or automated coding are realistic exposures, and undeclared activities may fall outside cover.
Can I switch broker part-way through the policy year?
Yes, by a letter of appointment that transfers servicing of the existing policy without changing the insurer or the cover. Most practices then re-market properly at renewal. Cancelling mid-term to start a new policy elsewhere is rarely worth the disruption for a small practice.
What should I compare besides the premium?
The limit and whether it is any-one-claim or aggregate, the excess, the retroactive date, the description of activities, exclusions, and the broker’s service. A lower premium attached to a narrower activity description is not a saving; it is a gap you have paid slightly less for.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.