AAT members professional indemnity insurance
Schedule Two of the AAT’s Guidelines and Regulations for Members in Practice details the minimum level of professional indemnity insurance required to be an AAT licensed member in practice. Currently, the minimum level of cover a firm must have must be the greatest of:
a) for sole traders: 2.5 times the firm’s gross fee income or £50,000;
b) for partnerships: 2.5 times the firm’s gross fee income or £100,000;
c) for limited companies: 2.5 times the firm’s gross fee income or £100,000
If the gross fee income of the firm is greater than £400,000, the maximum level of PII cover required by these regulations is £1,000,000. However, firms should always consider whether this is sufficient for their situation.
All AAT members are required to have insurance on an ‘any one claims’ basis by a policy of insurance providing full civil liability cover for claims arising from the provision of services. The policy must include unlimited legal defence costs and be fully retroactive.
The Guidelines and Regulations specify that the excess must not exceed, in annual aggregate:
a) in the case of a sole trader, £10,000;
b) in the case of a partnership, £10,000 per partner;
c) in the case of a limited company, £10,000 per director.
Run Off Cover If you cease working in practice the AAT strongly recommended that you maintain your professional indemnity insurance cover for a minimum period of six years after you have ceased your business.