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Proposal form guides
What each section of our accountants' professional indemnity proposal form asks, why underwriters ask it, and where answers tend to go wrong.
Part of: Professional indemnity insurance at Apex
In short
Apex's online proposal form for accountants runs in seven sections, covering the firm and its principals, the split of income by activity, audit and investment business, turnover by territory and largest clients, insurance history and the limit required. Under the Insurance Act 2015 the completed form is the core of the firm's fair presentation, so answers must be accurate and complete, and anything material the form does not ask about still has to be disclosed. For ICAEW and ACCA firms, the limit chosen must also meet the professional body's minimum.
For a business insurance contract, the proposal form is the main vehicle for the duty of fair presentation under the Insurance Act 2015. Section 3 requires the firm to disclose every material circumstance it knows or ought to know, or enough to put the underwriter on notice to ask more, in a way that is reasonably clear and accessible. A truthful but narrow answer to a narrow question is not necessarily a fair presentation.
What the firm "knows" includes what its senior management and the people arranging the insurance know, and what a reasonable search would reveal. In an accountancy practice that means asking every principal and consultant, and checking the complaints log, before answering.
Have to hand:
Our page on why the proposal form matters covers the general principle, and the accountants PI insurance guide covers the cover itself.
Expect the full trading name with all subsidiaries and trading styles to be insured, the date the firm was established, office addresses, and whether cover is needed for any previous firm, with its name, dates and the reason it stopped trading.
What the underwriter is establishing: exactly who is being insured. The entities on the schedule need to match the entities that sign engagement letters and issue accounts and returns. Work done under a trading style or a separate company that is not on the policy is an avoidable gap, and it often appears after an incorporation or the purchase of a fee block.
The predecessor question exists because PI is written on a claims-made basis. Liability follows the work, so a merged or acquired practice brings its past work with it unless someone has dealt with it deliberately. The reason a predecessor stopped trading matters too: a retirement presents differently from a closure that followed a dispute. If the predecessor has its own run-off cover, give the details. The professional bodies also have rules on cover after a practice ceases, so check what applies.
The form asks you to list every director, partner, principal and consultant with ownership or significant decision-making responsibility, then give the number of principals, qualified staff, unqualified staff and admin and support staff. Two integrity questions follow: whether any principal has been convicted of a criminal offence (other than minor motoring offences) or investigated, reprimanded or disqualified by a professional body; and whether any principal has been made personally bankrupt or been associated with a business that ceased trading, voluntarily or compulsorily.
The headcount split shows how much work is done by qualified staff and how much is delegated. Consultants are easy to leave out because they are not on the payroll, but if they advise clients under the firm's name they are part of the exposure.
The integrity questions are wide on purpose. "Investigated" includes an investigation that closed with no action. "Associated with a business that ceased trading" includes a solvent closure of a company where the principal was a director. Disclose with the outcome and a short explanation. An underwriter can usually work with a disclosed matter; an undisclosed one that comes to light later is a different conversation.
You break down last year's income by activity, in whole percentages totalling exactly 100%. The form then asks whether you have ever done audit work for a listed company, unquoted company or small trader; whether, in the last five years, you have issued a qualified audit report, restated financial statements the firm prepared, been dismissed or replaced as auditors, or provided services connected with the offering, sale or issue of securities; whether you have ever worked for clients in the entertainment or sports industry; and whether you are, or have ever been, authorised for investment business.
The activity split drives the rating more than the total does. Compliance work such as bookkeeping, payroll and year-end accounts presents differently from tax advice, audit or corporate finance, even at the same fee income. Take the split from your records, not from memory.
The audit questions look for third-party exposure and for signs of trouble. A restatement can point to an error; a dismissal can follow a disagreement. Securities work can expose the firm to investors as well as the client. The audit question asks "ever", so a firm that gave up audit work years ago still answers yes.
Entertainment and sports clients often have complex, high-value personal tax affairs, which is why they are asked about separately. On investment business, answer yes if the firm has ever been authorised by the FCA or licensed by a professional body for exempt regulated activities. We will then send a separate financial services questionnaire.
The form asks for turnover by year and territory for five completed years plus next year, and your three largest clients by annual fees.
Fee income drives both the rating and, for ICAEW and ACCA firms, the regulatory minimum limit. See how gross fee income sets the minimum limit. The figures need to match your accounts and anything you report to your professional body. The figure for next year is a statement of expectation and must be made in good faith; if a large new client or a new service line is coming, say so.
The territory split matters because work for overseas clients, or advice on overseas tax, can sit outside the standard cover or be priced differently.
The largest-client question is about concentration. The form flags that underwriters will ask if a single client is more than about a quarter of your fees. A firm that depends heavily on one client may find it harder to push back on that client, and a dispute with it would cost both the fees and a claim.
You give your current insurer, broker, limit, excess, premium and renewal date, then answer three questions: whether any claim has been made, or loss suffered, in respect of professional work, including claims settled, denied or never paid; whether you are aware of any circumstances that might lead to a claim; and whether any PI application has been declined, refused renewal, cancelled or accepted only on special terms.
The circumstances question most often causes trouble. The form is explicit: it covers anything where a client has complained or threatened action, or where you think a problem could later become a claim, even if you do not expect it to come to anything. In an accountancy practice that includes a missed filing deadline that led to penalties, a relief or election that was not claimed in time, an HMRC enquiry that calls your advice into question, and a client disputing a fee because they are unhappy with the work.
Ask every principal and consultant in writing before answering, and keep the replies. If something turns up, it usually needs notifying to your current insurer before expiry, not just disclosing to the next one. See circumstance notification explained.
You choose a limit of indemnity, state any preference on excess and give the start date.
For ICAEW firms the minimum limit, from 1 September 2024, is £2m; a firm with gross fee income under £800,000 may instead hold 2.5 times its fee income, with a minimum of £250,000. ACCA sets its own minimum, which also depends on fee income. Check the current rules before you choose: see the ICAEW PII guidance, the ACCA PII rules, and our pages on ICAEW PI requirements and ACCA PI requirements. The professional bodies also set requirements for the policy terms, not just the limit.
The regulatory minimum is a floor, not a measure of your exposure. Your largest clients, the size of the transactions you advise on, and any figure a client requires may all point higher. Any cap on liability in your engagement letters is also relevant. Check whether the limit applies to any one claim or in the aggregate, and whether defence costs sit inside or outside it. A higher excess usually lowers the premium, but the firm pays it on each claim.
This form has no free-text box for other information. If something material is not covered by any question, send it to us in writing with the form.
You give your full name and position in the firm. The person submitting is confirming, for the firm, that the answers are true and complete and that nothing material has been withheld, so read the declaration first. The duty continues until cover starts: if anything changes in the meantime, such as a new complaint or a letter of claim, tell us before inception.
Not necessarily. Section 3 of the Insurance Act 2015 requires disclosure of every material circumstance the firm knows or ought to know, or enough to put a prudent insurer on notice to ask more. If something material does not fit any question, it still needs disclosing in writing.
If the enquiry could call your work or advice into question, treat it as a circumstance: disclose it on the form and consider notifying your current insurer. An enquiry that has nothing to do with your work is unlikely to be a circumstance, but if in doubt, disclose.
The question asks whether you have ever done audit work, and claims can be brought long after the work was done. The underwriter needs to know about the exposure even if no new audit work is being taken on.
Since 1 September 2024 it is £2m, or, for a firm with gross fee income under £800,000, 2.5 times fee income with a minimum of £250,000. It is a regulatory floor, and many firms need more. ICAEW's own guidance sets out the detail, including how fee income is defined.
Notify it to your current insurer before the policy expires, not just disclose it to the next one. PI is claims-made, and a circumstance validly notified under the expiring policy is generally dealt with under that policy. Then disclose it on the proposal form as well.
Start your proposal online and save it as you go, or upload a completed proposal from your current broker on the first page. Or call 0117 325 0027.
Start your proposal Request a callbackApex 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, not advice on your individual circumstances. It explains the kinds of question asked and does not reproduce any insurer's form or guarantee that cover will be available or on what terms.
