ICAEW professional indemnity insurance requirements for accountants
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
If you run an accountancy practice regulated by the ICAEW, professional indemnity insurance is not optional. It is a mandatory condition of holding a practising certificate and carrying on public practice, and the amount you must buy is driven by a specific formula rather than a flat number. This page explains how that formula works, who it applies to, and the practical points that catch firms out — without quoting figures that change from year to year.
Who the ICAEW PII rules apply to
The requirement falls on ICAEW-regulated firms engaged in public practice — broadly, any practice offering accountancy services to clients under the ICAEW's supervision. The obligation sits with the firm, not just the individual, and applies whether you are a sole practitioner, a partnership, an LLP or a limited company.
The rules are set out in the ICAEW's Professional Indemnity Insurance Regulations, made under the Institute's bye-laws. Because the ICAEW updates these regulations periodically, treat the version published on the ICAEW website as the authoritative source and check its effective date.
How the gross fee income (GFI) mechanism works
Rather than setting one fixed sum for every firm, the ICAEW ties the minimum limit of indemnity to the size of the practice, measured by gross fee income. The larger your fee income, the more cover you are required to carry. The structure has three moving parts:
- A multiple of GFI. The core requirement expresses the minimum sum insured as a set multiple of your gross fee income for the relevant period.
- A minimum floor. Small firms whose calculated figure would fall below a stated minimum must still carry at least that floor amount — so very small practices are not left with negligible cover.
- A maximum cap. For larger firms, the regulations cap the required minimum limit at a ceiling. Above that point the ICAEW expects the firm to judge what is adequate for its own risk profile rather than simply scaling the multiple upward.
In practice this means three firms of very different sizes can each be compliant while carrying very different limits of indemnity. The exact multiplier, the floor and the cap have all been revised over time, most recently in the ICAEW's ongoing updates to the regime — so the sensible approach is to run your own GFI through the current published table before you renew.
Not sure what your GFI-based minimum works out to this year? We size the cover for you and place it with an ICAEW-recognised insurer.
Get a PI quote →Beyond the limit: the other conditions
The minimum limit is only part of what the ICAEW regulations require. Several structural conditions matter just as much:
| Requirement | What it means in practice |
|---|---|
| Recognised insurer | Cover must be arranged with an insurer that has agreed to the ICAEW's terms for participating insurers, not just any PI provider. |
| Limit of indemnity | At least the GFI-calculated minimum, on the basis (per claim or aggregate) set out in the regulations. |
| Maximum excess | The policy excess a firm carries is subject to limits, so the deductible cannot be set so high that cover is undermined. |
| Run-off cover | When a firm ceases practice, it must arrange run-off cover for the period the regulations specify, because claims can surface years after the work. |
Most PI claims against accountants are notified long after the engagement ended, which is why run-off cover and the "claims-made" nature of PI policies matter so much. If you let cover lapse or wind down a practice without run-off protection, an old piece of advice can still generate a claim you are personally exposed to.
"Adequate and appropriate" — the figure is a floor, not a target
It is important to read the GFI minimum as exactly that: a minimum. Meeting the ICAEW's calculated figure makes you compliant, but it does not automatically make you well protected. A firm advising on complex tax structures, corporate transactions or large audits can carry exposures far greater than a mechanical multiple of fee income would suggest. Our page on appointing a PI broker for accountants sets out how a placement runs from scoping through to renewal.
The regulations expect firms to consider whether more than the minimum is appropriate for the actual work they do and the clients they serve. A sensible review looks at your largest single engagement, the potential size of a claim if that work went wrong, and whether one claim could exhaust an aggregate limit. Buying only to the ICAEW floor is a common way firms end up under-insured.
Checking the current figures
Because the ICAEW revises the multiplier, the minimum floor, the cap and the run-off period from time to time, this page deliberately avoids quoting today's numbers. Before you renew or restructure your practice, take two steps: read the current version of the ICAEW's PII Regulations on the ICAEW website and note its effective date, then apply your own gross fee income to that current table. If you would rather not do the arithmetic yourself, a broker who works with accountancy firms can size it for you and confirm the insurer meets the ICAEW's requirements. Start a quote with Apex and we will calculate the minimum against your latest GFI.
Common questions
Is PI insurance actually compulsory for ICAEW firms?
Yes. For ICAEW-regulated firms in public practice it is a mandatory requirement under the Institute's PII Regulations, and holding compliant cover is a condition of continuing to practise. It is separate from any insurance a client contract might request.
How is my minimum limit calculated?
It is based on your gross fee income — a set multiple of GFI — subject to a minimum floor for smaller firms and a maximum cap on the required minimum for larger ones. Run your current GFI through the ICAEW's published table to get your own figure.
What happens to cover when I retire or close the firm?
You are required to arrange run-off cover for the period set out in the regulations, because PI policies respond to claims made while cover is in force. Without run-off, a claim about past work could leave you personally exposed after the practice has closed.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.