CIT Members Professional Indemnity Insurance
The main rules relating to members of The Chartered Institute of Taxation (CIOT) professional indemnity insurance are as follows:-
Firms are required to have professional indemnity insurance with a limit of indemnity that is the greater of two and a half times the firm’s gross fee income for its last financial year or 25 times largest fee raised in past financial year subject to a minimum of £100,000 for a sole practitioner or £200,000 in any other case and a maximum of £1,000,000.
The maximum excess allowed is the lower of £20,000 per principal in the aggregate or 2% of the limit of indemnity.
The policy cover is required to be for all ‘civil liability’ incurred in connection with the conduct of the business and can be provided by any EU insurers authorised by law. The rules state that Fidelity guarantee cover is ‘recommended’ but not compulsory.
Run-off cover following cessation must be maintained for at least 6 years.
Firms regulated by certain other professional bodies may be exempt from the CIOT Professional Indemnity requirements.