ICAEW PII Bye-law 61 and the Professional Indemnity Insurance Regulations: what accountants must carry

~4 min read

Reviewed by Matthew Bartlett, Director · Last reviewed 2026-07-06

The professional indemnity insurance regime for ICAEW-regulated accountants and firms sits in Bye-law 61 of the Institute's bye-laws and is elaborated in the Professional Indemnity Insurance Regulations issued by the ICAEW Council. Every ICAEW member in public practice, and every ICAEW-regulated firm, must hold PII that meets those regulations. Unlike the solicitors regime, ICAEW's rules are not a single set of Minimum Terms and Conditions imposed on all insurers by regulation — they are a set of firm-level requirements that any qualifying insurer's policy must meet. That difference in mechanism has practical consequences for how brokers place accountants' PI and what firms should look for at renewal.

Who the regulations bind

The regulations bind ICAEW members and firms that are engaged in public practice. Public practice is defined broadly under the ICAEW Code of Ethics and captures both audit engagements and non-audit work. A member holding a practising certificate must hold PII from the point at which public practice begins. A firm — whether structured as a sole practice, partnership, LLP or limited company — must hold cover in the firm's own name so that clients and third parties can look to the policy directly.

Members who are employed in industry and hold no practising certificate do not require ICAEW PII cover, though the employer's E&O or D&O programme may cover them incidentally. Members whose only work is audit under Registered Auditor status face the additional layer of audit-specific requirements under the Statutory Auditors and Third Country Auditors Regulations 2016, and typically carry a limit substantially above the ICAEW minimum.

What the regulations require

Three requirements matter most in day-to-day placement. First, the policy must be placed with an insurer that meets the ICAEW's approval criteria — an insurer authorised by the PRA or FCA, or an EEA insurer with UK permissions to write general insurance, and with a financial strength rating that satisfies the regulations' minimum threshold. Second, the limit of indemnity must be at least the higher of £1.5 million or 2.5 times the firm's gross fee income for the last complete financial year, up to a stated ceiling. The 2.5x formula is what makes accountants' PI meaningfully different from the flat MTC floor for solicitors — the limit scales automatically with the firm's turnover. Third, cover must be maintained on a claims-made basis with a run-off obligation attaching on cessation.

Approved insurers

ICAEW does not publish a closed list of approved insurers in the way the SRA publishes its participating insurer list. Instead, the regulations set the criteria and any insurer that meets them is capable of writing ICAEW-compliant PI. In practice, the accountants' PI market is served by a smaller, more concentrated pool of insurers than solicitors' — a mixture of Lloyd's syndicates, UK company market insurers, and a handful of European insurers writing on UK-authorised paper. Firms should confirm at every renewal that the placed insurer meets the current regulations, particularly financial strength ratings, because insurer downgrades can and do move a policy from "compliant" to "non-compliant" mid-year.

What Bye-law 61 does that the regulations do not

Bye-law 61 is the enabling authority. It gives the ICAEW Council power to make the PII Regulations and to investigate members whose cover is not compliant. The regulations themselves contain the substantive detail. A member found to have failed to hold compliant PII faces disciplinary sanctions ranging from a caution to withdrawal of the practising certificate under the ICAEW Disciplinary Byelaws. The mechanism is administrative and reputational rather than statutory — but a lapse in cover is, in the ICAEW's own words, a matter capable of undermining public confidence in the profession.

Comparing to the SRA regime

The differences from the solicitors regime are worth understanding because clients often ask why "professional indemnity" looks different across the two professions. The SRA sets Minimum Terms and Conditions that every solicitor PI policy must contain, and it publishes an annual list of participating insurers who have signed the Participating Insurers Agreement. ICAEW sets firm-level requirements and lets the market meet them through ordinary policy wordings. Aggregation is worded by the insurer rather than dictated by regulation. Run-off is two years minimum for ICAEW versus six years for solicitors. The consequence is a broader range of policy wordings on the accountants side, and a heavier onus on the broker to check that a given wording actually complies with the ICAEW regulations for the firm in question.

Worked example

Illustrative only. Figures depend on the firm and the market. A four-partner ICAEW firm with £2.4 million of gross fees in the last completed financial year approaches its June 2026 PII renewal. Applying the 2.5x formula, the regulations require a minimum limit of £6 million each and every claim (£2.4m × 2.5), higher than the £1.5 million floor and therefore the operative minimum. The broker approaches five insurers on the accountants panel. Three return terms. Two of the three wordings meet the ICAEW regulations without amendment; the third has an aggregation wording that would require an endorsement to be fully compliant for a firm with the client concentration profile the firm has, and the broker negotiates that endorsement in. The firm binds the best-value compliant quote at a premium 4 per cent below the prior year.