PII Regulations

The regulations relating to audit, insolvency, probate, investment business and the eligibility requirements for a practising certificate (PC) all require members and firms to comply with ICAEW's PII Regulations. The PII Regulations give details of the amount of insurance required, insurers and the policy wording insurers must use.

Current PII Regulations

• Access the PII Regulations effective from 1 September 2024
• View the PII Regulations archive

Updates to the PII Regulations took effect on 1 September 2024

• Find out more about what changed
• View a schedule of amendments to the regulations

PII minimum approved policy wording

Qualifying insurance is underwritten in terms of the minimum wording, which is approved by ICAEW. Policies must use this wording or contain a difference in conditions endorsement.

• ICAEW PII minimum approved policy wording – effective from 1 September 2021
• Schedule of amendments to the PII minimum approved policy wording (1 September 2021)

Non-members can download an order form to obtain historic copies of ICAEW's minimum approved policy wording.

Participating insurers

You must obtain the insurance required by the PII regulations from a participating insurer. These insurers have agreed to meet the requirements of ICAEW's minimum approved policy wording. The fact that an insurer is on the list does not imply that ICAEW has performed independent checks on the insurer's suitability. ICAEW recommends that you investigate the current ratings and discuss with your brokers the suitability of these insurers when you take out or renew your insurance.

Qualifying insurance

When obtaining PII or renewing existing cover, you should ensure you arrange qualifying insurance and check the following:

• The insurer is on the list of the current list of participating insurers (and if the insurance is provided by more than one insurer, that all insurers are participating).
• The cover meets the minimum limits of indemnity set out in ICAEW’s PII Regulations.
• The policy provides cover which meets ICAEW’s approved minimum wording and includes at least six years’ retroactive cover (ie, cover for claims arising in relation to advice, services and business activities carried out during the last six years).
• Please also remember to check that the policy complies with ICAEW's updated requirements that took effect in September 2024.

The difference in conditions clause

All participating insurers have agreed to provide cover under terms that match those of ICAEW's approved minimum wording. Many insurers use their own policy wording and, in some instances, this will include extensions of cover beyond the cover that is required under the minimum wording. Participating insurers which use a different policy wording must also include a difference in conditions (DIC) clause in the policy and, as an extra safeguard, in the absence of an express DIC clause, it will be deemed to apply. In the event of a dispute between a policy holder and their insurer, the difference in conditions clause should ensure that ICAEW's minimum wording overrides any provision in the insurer's wording that is less favourable to the insured.

• View an example of a difference in conditions endorsement

All ICAEW compliant policies should include a DIC clause and there is provision in ICAEW’s contract with each insurer for firms to enforce this requirement. If you require further information about this, please call +44 (0)1908 248 250 or use our Live Chat service.

Issues with obtaining PII

ICAEW recommends you take necessary steps to ensure there is no gap in insurance cover which would be a breach of the PII Regulations.

• Find out what to do if you are struggling to obtain PII

Fair presentation

Firms have a legal obligation to make a fair presentation of the risk on taking out or renewing cover. Therefore, in order to safeguard the indemnity available for a claim should it arise, it is essential that firms are open and transparent with their insurer/prospective insurer when taking out or renewing cover as to:

• the activities they undertake;
• their claims history and any potential claims (or grounds to suspect a claim - ‘circumstances’);
• their risk management strategy; and
• their disciplinary/regulatory history.

In-depth and complete information should be provided at the outset of the renewal process in an effort to make proposals more attractive to insurers, and to assist in obtaining a timely response from insurers as to whether cover terms will be offered.

The duty of fair presentation was introduced by the Insurance Act 2015.

Renewal of PII

The PII Committee recommends that firms prepare early for their renewal and that they take advice from a trusted and reputable broker or other adviser when taking out their insurance. It is particularly important to prepare early ahead of updated requirements effective from 1 September 2024.

The committee recommends firms discuss their placement strategy with their broker to ensure access to a number of different insurers; specifically, firms may wish to clarify whether their brokers are ‘whole of market’ brokers. If firms are unable to obtain a new policy before their current policy expires, they should note that their last insurer is required, under the minimum approved wording, to extend cover for an additional 30 days (see clause D3).

Importance of run-off cover

There can be a lot to think about when you are deciding to close down a firm, including securing appropriate run-off insurance. Run-off insurance responds to claims for work done while in practice but arising after the practice has ceased.

• Learn more about run-off insurance

PII and tax mitigation schemes

Insurers take a cautious view of insuring firms that advise on or introduce clients to tax mitigation schemes.

Section 8 of the guidance, Professional conduct in relation to taxation, gives advice to firms on how they should deal with tax schemes, including if the only involvement is to make introductions to other firms.

ICAEW’s engagement letters helpsheet includes material provided by the Tax Faculty for tax practitioners about specialist and ad hoc tax advisory services.

PII frequently asked questions

• Find out the answers to common questions we receive about professional indemnity insurance

Contact us

T: +44 (0)1908 248 250
E: pii@icaew.com
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