Changing PI insurance broker: tax advisers

Why tax advisers change broker

The usual complaints are service and understanding. Renewal arrives late with a premium change and no explanation; requests for confirmation of cover take days; and the broker plainly does not distinguish between compliance work, advisory work and HMRC enquiry representation, which carry different exposures. A tax practice whose work has shifted, into R&D claims, inheritance tax planning or international matters, may also have outgrown the wording its broker first arranged.

Professional body context matters here. Members of the Chartered Institute of Taxation and the Association of Taxation Technicians who are in practice are required by their bodies’ professional indemnity insurance regulations to hold PI cover. Any new arrangement has to keep you compliant with those requirements, and a broker who works with tax professionals will check this as a matter of course.

Switching broker does not have to mean switching insurer. Sometimes the recommendation is to stay put on better-presented terms; sometimes it is to move. Judge the broker on the quality of that analysis.

The long tail: why continuity is everything in tax work

PI operates on a claims-made basis: the policy answering a claim is the one in force when the claim is made. Tax work stretches that principle further than most professions. Advice on a reorganisation, a relief claim or an estate plan can sit unchallenged for many years before an HMRC enquiry, a sale or a death exposes the problem.

Your retroactive date is therefore the crown jewel in any broker move. It should sit at the start of your unbroken insurance history, and it must survive the switch intact. A new policy with a later retroactive date silently uninsures every year of advice before it. Equally, there must be no gap, even of days, between the old policy ending and the new one beginning.

Ask the new broker to confirm both points in writing before the old policy lapses. It is a two-line email that protects decades of work.

Mid-term moves, renewal moves and mergers

Renewal is the natural switching point: clean end, clean start, no cancellation arguments. If you want to move mid-year, a letter of appointment can transfer servicing of the existing policy to a new broker without touching the cover itself, with a full re-market to follow at renewal.

Mergers and retirements are different. When a practice merges into another or closes, its claims-made cover needs a deliberate ending: run-off cover that continues to respond to claims about past work after the practice stops trading. A merger conversation with a new broker should cover who insures the historic liabilities, on whose policy, and for how long. Professional bodies expect past work to remain covered, and buyers of practices will ask about it in due diligence.

What a new broker needs from a tax practice

A clear activity split first: compliance and returns, advisory and planning, HMRC enquiry and dispute work, specialist areas such as R&D relief, VAT or trusts and estates. The proportions shape how insurers see the risk, and an accurate split is part of the fair presentation you owe under the Insurance Act 2015.

Then the history: claims and circumstances for the past several years, including matters notified out of caution that came to nothing, plus your current schedule, limit, excess and retroactive date. If you handle HMRC enquiries for clients, mention any fee protection or tax investigations service you offer alongside, so the boundary between that product and your own PI is understood.

Finally, any engagement letters or client contracts that commit you to carry particular cover. The new recommendation should match the obligations you have already accepted.

Judging the quotes that come back

Price last, wording first. Compare the limit and its basis, the excess, the retroactive date, the description of activities, and how the policy treats regulatory and disciplinary matters alongside civil claims. A wording that does not clearly embrace your specialist work, or that carves out advice given more than a set number of years ago, is not comparable with one that does, whatever the premium.

And ask about service: who answers technical queries mid-year, how notifications are handled, and what the renewal process will look like next time. The point of the exercise is a better arrangement, not merely a new logo on the invoice.

Frequently asked questions

Will changing broker affect my CIOT or ATT compliance?

It should not, provided the new arrangement continues to meet your body’s professional indemnity insurance requirements. Tell the new broker which body you belong to at the outset so the recommended cover is checked against those published requirements before anything is bound.

Why is the retroactive date so important for tax advisers?

Because tax advice can be challenged many years after it is given, and a claims-made policy only covers work done after its retroactive date. If a new policy carries a later date than your old one, earlier advice becomes permanently uninsured. The date must survive the switch unchanged.

We are merging with another firm. Is switching broker enough?

No. A merger needs a plan for the historic liabilities of the merging practice, usually run-off cover or an agreed continuation under the successor’s policy. That should be arranged deliberately as part of the transaction, not left to whatever happens at the next renewal.

What claims history will a new broker ask for?

Typically several years of claims and circumstances, including matters you notified out of caution that never developed. Disclosing them is part of the fair presentation duty under the Insurance Act 2015, and leaving them out risks the new policy being contestable when you need it.

Does HMRC enquiry work change how my PI is arranged?

It is an activity worth describing precisely, because representation in enquiries and disputes has its own exposure profile. If you also offer clients a fee protection product for enquiry costs, the new broker should understand both so your own PI and that product sit together sensibly.

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.