ACCA Professional Indemnity Insurance (PII) regulation update
With effect from 1 September 2023, the ACCA has introduced new Professional Indemnity Insurance (PII) regulations.
PII is a mandatory purchase for practising ACCA members in the UK and Ireland and a PII policy is there to cover you in the event a mistake is made, for which you are sued or investigated (or both).
The update in regulation comes as part of a series of planned modernisation and improvements to the Global Practising Regulations and the ACCA Rulebook. This is in light of significant change in the PII insurance market in recent times and the importance of PII in the public interest.
In summary, the update in regulation is a simplification of the rules. Although there are a number of amendments, we have outlined below those that we see as most notable.
- The minimum limit of indemnity has increased from £50,000 to £100,000. This mirrors the minimum level for ICAEW members.
- The ‘twenty-five times the largest fee’ multiplier has been removed to calculate PII limits and instead has been replaced with new bandings:
- For firms generating income under £600,000, the PI limit needs to be the greater of two and a half times the relevant total income or £100,000
- For firms generating income in excess of £600,000 the minimum limit of indemnity is set at £1.5Million.
What does this mean for ACCA members?
Where firms have (in some cases) needed to purchase significant limits on their PII policy, the changes in regulation mean that they may now be able to purchase a lower limit moving forwards – which could help to reduce the costs of their PII policy.
Combine this with signs of a softening market, this will be welcome news for ACCA member firms.
If you would like to discuss this topic further and understand the implications this may have on your firm, please don’t hesitate to contact the team. In the meantime, you can find out more about the new regulations on the ACCA website.
Paul has 20 years’ experience securing Professional Indemnity insurance for his clients. He and his team support financial and construction professionals with insurance, risk mitigation, and claims management.