Professional Indemnity Insurance (PII) is there to protect your business if a client or customer says you’ve made a mistake. For example, if a customer alleges that you gave incorrect advice – and that this has negatively impacted their business – they may sue you. Another example is if a customer says poor advice from you has damaged their reputation. Professional Indemnity Insurance is there to help you defend your business against these types of claims.

Yes, Professional Indemnity Insurance is mandatory for any accountants who engage in public practice. Firms with employees also have to hold Employers’ Liability insurance.

Fidelity Guarantee Insurance (FGI) provides cover for your business against theft of the firm’s own money, securities or property by an employee, partner, contractor, or volunteer. FGI can also be known as first-party fraud, theft or employee dishonesty cover. FGI cover can sometimes be confused with third-party fraud and dishonesty cover however third-party fraud and dishonesty refers to theft of the client’s money rather than the firm’s own money, and this tends to be covered within the main insuring clause (civil liability) of a professional indemnity policy.

Fidelity Guarantee Insurance is not compulsory for all accountants, however it is compulsory for ACCA Members firms who have employees or sub-contractors. However, it is strongly recommended for accounting firms with employees, multiple partners, or contractors.

Some accountancy professional bodies require their members to obtain FGI. For example:

ACCA Regulations require that member firms in public practice with more than one staff member have a minimum of £100,000 cover in place for any one claim, to help protect the business and enable it to continue trading following a fraudulent act. Practices must also ensure that the Fidelity Guarantee Insurance extends to cover sub-contractors.

Whether you are a member of Association of Chartered Certificated Accountants (ACCA), The Institute of Chartered Accountants in England and Wales (ICAEW), Chartered Institute of Public Finance and Accountant (CIPFA), Chartered Institute of Management Accountants (CIMA) or similar – and you are unsure about your specific requirements, it’s always advisable to consult with your professional body or an insurance specialist.

Yes, the Lockton/ACCA Scheme quotation is compliant with both professional bodies.

Public Liability Insurance covers the cost of legal action and compensation claims made against your business if a third party is injured or their property suffers damage whilst at your business premises or when you are working in their home, office or business property.

Employers' Liability Insurance (EPL) is compulsory for most businesses with employees. It safeguards your company against claims made by workers due to work-related injuries or illnesses. This coverage also includes legal costs to defend you if the government or an administrative or regulatory body brings any action against you in relation to a covered claim.

However, it typically excludes claims related to motor accidents, intentional harm, injuries outside specified territories, and those covered by other insurance policies.

Management Liability Insurance is designed to protect the directors, officers and managers from the specific exposures faced by them as decision makers of an organisation.

The cover includes:

• Directors and Officers liability, protecting against claims of ‘wrongful act’

• Corporate legal liability providing cover for various company exposures including health and safety allegations

• Employment practices liability covers claims relating to discrimination or wrongful dismissal.

However, it will not cover businesses for financial loss for bodily injury, financial gain from wrongdoing, and claims related to business failures or pension mismanagement.