Professional Indemnity Insurance for New Accountants — Your First Policy (2026)

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05

1. Do you actually need PI as a new accountant?

For most accountants in practice in the UK, the answer is yes — and often for two separate reasons at once.

The regulatory duty. If you're a member of ICAEW (the Institute of Chartered Accountants in England and Wales) or ACCA (the Association of Chartered Certified Accountants) and you provide accountancy services to the public, holding professional indemnity insurance is a condition of your practising certificate. ICAEW sets this out in its Professional Indemnity Insurance Regulations, and ACCA requires members in practice to hold PII that meets its minimum terms. These are not suggestions — practising without compliant cover puts your certificate, and your ability to trade, at risk.

If you're an AAT (Association of Accounting Technicians) licensed member or a member of CIMA (the Chartered Institute of Management Accountants) offering services to clients, your body will also have its own requirements around holding adequate PI cover. The exact minimum terms differ by body, so it's worth checking your own institute's rules — but the direction of travel is the same: if you advise clients, you're expected to be insured.

The client-contract reality. Even setting regulation aside, PI has become a commercial expectation. Larger clients, lenders, and anyone engaging you through a formal contract will frequently ask you to confirm you hold PI cover — and sometimes to a specific minimum limit — before they'll sign. A new firm without PI can find itself locked out of exactly the work it's trying to win. So for a first-time buyer, PI is less a cost of doing business and more a permission to do business at all.

2. When your cover must start — and why day one matters

Here's the point that trips up more new accountants than any other: your PI cover should begin from your first client engagement, not from the day your practice "feels real" or your income reaches a certain level.

The reason is simple. The moment you accept your first piece of paid work — a set of accounts, a tax return, a piece of advice — you take on a professional duty of care. If something in that work is later alleged to be wrong, the claim relates back to when you did it. If you weren't insured at the time, and you weren't insured when the claim arrived, you're funding the defence and any settlement personally.

A common and expensive misconception is "I'll get insured once I'm properly up and running." But the first few engagements of a new practice are often where mistakes are most likely — new systems, new processes, learning the rhythm of running your own book. Starting cover on day one closes the most vulnerable gap you'll ever have.

Practically, this means arranging your PI policy as part of setting up the practice — alongside registering with your professional body and HMRC — rather than as an afterthought. If you'd like to line up cover before you take on your first client, that's exactly the right instinct.

3. How much cover a new firm actually needs

PI cover is expressed as a "limit of indemnity" — the maximum the insurer will pay out. For a new practice, choosing this figure feels like guesswork, but a few sensible anchors make it manageable.

Your professional body's minimum. Start here. ICAEW and ACCA both set minimum limits and, importantly, they often scale the required minimum to your firm's income — so a larger practice is expected to carry a higher limit. Check the current minimum your body specifies and treat it as a floor, never a target.

What your clients demand. Beyond the regulatory floor, individual clients may contractually require you to hold a specific limit — commonly £1m, £2m or £5m — before they'll engage you. If you're chasing work with larger organisations, it's worth understanding their likely expectations early, because it's easier to buy the right limit from the outset than to raise it mid-contract.

Your actual exposure. The real question is: if a piece of your work went badly wrong, how large could the resulting loss be? An accountant advising owner-managed businesses on tax has a different exposure profile to one doing straightforward bookkeeping for micro-clients. Think about the value of the transactions and figures your advice touches, not just your fee for the job — a modest fee can sit behind a decision worth many multiples of it.

Limits such as £1m, £2m and £5m are the common building blocks, and the right one is a balance of the three factors above. A broker's value here is helping you land on a figure that satisfies your regulator and your clients without over-buying. This is a conversation, not a form-filling exercise — and it's one worth having properly for your first policy.

4. What shapes the cost of a first policy — without the price tags

Every practice is priced individually, so no honest broker will quote you a figure before understanding your firm. But it helps to know what an underwriter is actually weighing up — especially reassuring when you're new and worried a lack of history counts against you. In practice, a clean slate is often an advantage: there are no past claims to explain.

For a new accountancy firm, underwriters typically look at:

• Estimated turnover. Because you have no trading history, you'll give a reasonable, honest estimate of your first year's fee income. This is one of the biggest drivers — a smaller book generally means a lower exposure.
• The services you'll offer. Bookkeeping, payroll, accounts preparation, personal and corporate tax, audit, and specialist advisory work each carry different risk. Higher-stakes advisory or tax-planning work naturally attracts more scrutiny than routine compliance.
• Your qualifications and experience. Your professional body membership, practising certificate and years of relevant experience all count in your favour. Being a qualified ICAEW, ACCA, AAT or CIMA member in good standing tells an underwriter you work to recognised standards.
• Your client profile. The size and type of clients you expect to serve, and whether you work with regulated or higher-risk sectors.
• The limit of indemnity you choose, and the excess (the first slice of any claim you agree to pay yourself).

Notice how much of this a new firm simply doesn't have to provide: no claims history to disclose, no years of prior policies to reconcile. First-time buyers often find the process lighter than they feared. The key duty on you is a fair presentation of the risk — answer honestly, don't understate your turnover or the services you'll offer, and your cover will respond properly when you need it.

5. "Claims-made" — in plain English

This is the single most important technical feature of PI, and worth taking a minute to understand before you buy your first policy.

Most insurance you've bought — car, home — is "claims-occurring": it responds to events that happen during the policy year. PI is different. It's written on a claims-made basis, which means the policy that responds to a claim is the one in force on the day the claim is made against you — regardless of when you actually did the work.

Two consequences follow, and both matter enormously for a new firm:

Continuity is everything. Because a claim can surface months or years after the work was done, you need cover in force when the claim arrives, not just when you did the job. If you let your policy lapse — even briefly — a claim landing during that gap may not be covered at all, even though you were insured when you did the work. This is why renewing on time, every year, from your very first policy onwards, is non-negotiable.

Retroactive cover protects your back catalogue. A well-structured PI policy includes a "retroactive date", meaning it can cover work you did before the current policy started, as long as you've held continuous cover. For a brand-new firm this is clean and simple — your retroactive date is essentially when you started practising. But it only stays clean if you never let the chain break.

The takeaway: PI isn't a cost you switch on and off as convenient. It's a continuous shield you start on day one and keep running, unbroken, for as long as you practise — and, crucially, for a period after you stop (through what's known as "run-off" cover). Getting that mental model right from your first policy saves a great deal of grief later.

6. How to buy your first policy — what you'll need

The good news for a new firm is that the information required is modest, and most of it you already have to hand from setting up the practice. Expect to be asked for:

• Your firm's name, structure (sole practitioner, partnership, limited company) and start date.
• Your professional body membership and practising certificate details.
• An honest estimate of your first-year fee income.
• The range of services you intend to offer, and a sense of the clients you'll serve.
• The limit of indemnity you want (guided by your regulator's minimum and any client requirements).
• Confirmation of whether you're aware of any circumstance that could give rise to a claim — for a genuinely new firm, this is usually a simple "no".

That's typically it. There's no years of accounts to dig out, no claims history to reconstruct. Working through a broker means you describe your practice once and have the market approached on your behalf, rather than filling in the same details across multiple insurers yourself. When you're ready, you can start a quote for your first accountancy PI policy here and we'll take it from there.

7. Common first-timer mistakes to avoid

• Leaving it too late. Buying PI after taking on your first client leaves a gap you can never fill retrospectively. Arrange it as part of set-up.
• Buying only to the bare minimum. Your body's minimum limit is a floor, not a recommendation. Consider your actual exposure and what clients will require.
• Under-estimating turnover. Low-balling your income to reduce cost undermines the fair-presentation duty and can jeopardise a claim. Give a realistic figure.
• Letting cover lapse to save money. Because PI is claims-made, a break in cover can leave past work exposed. Continuity beats short-term savings every time.
• Not disclosing all your activities. If you branch into tax advisory, payroll or company secretarial work, make sure the policy reflects it. A policy that doesn't match what you actually do may not respond.
• Forgetting run-off. When you eventually wind down or sell the practice, claims can still arrive. Run-off cover keeps you protected after you stop trading — plan for it, even if it's years away.

8. About Apex — and why we can quote this quickly

Apex Insurance Brokers Limited is an FCA-authorised insurance broker based in Bristol (FRN 724952). We arrange professional indemnity cover for accountants across the UK, from sole practitioners writing their first policy to established firms.

Because we place accountancy PI regularly, we know what underwriters need from a new firm and how to present your practice fairly and efficiently — which means quotes for first-time buyers are usually turned around quickly. Just as importantly, we'll explain the parts that matter (limits, claims-made cover, continuity and run-off) in plain terms, so your first policy is one you actually understand rather than one you simply signed.

If you're setting up in practice and need PI in place before your first engagement, we'd be glad to help you get it right from day one. Start your quote and we'll do the legwork.

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.