Professional Indemnity Insurance
All practising certificate holders must have professional indemnity insurance as outlined in Bye Law 9.
CPA Ireland requires that all holders of practising certificates obtain a minimum level of insurance cover and practising certificate holders will be required to evidence compliance, with the Institute’s Professional Indemnity Insurance Bye-Law, on their annual renewal form.
Levels of Cover
The level of indemnity required by practitioners holding practising certificates will be dependent upon the firm’s ‘total income’ for the previous financial year. The Bye Laws require that the minimum limit of indemnity on PII in respect of each and every claim shall be the higher of two and one-half times the gross fee income of the practice for its last financial year or in the case of a sole practitioner, €70,000 or in any other case €130,000. The minimum limit of indemnity shall not be construed as the recommended level which is a matter for each Member to consider carefully taking their individual circumstances into consideration. For the purposes of the Bye-Laws an upper limit of €1,500,000 is acceptable.
Any member holding a Practising Certificate without appropriate PII is in breach of the Bye laws and could be subject to regulatory or disciplinary action.
Cessation of Practice
Members ceasing to practise must make arrangements for the continued existence of adequate PII cover for a period of at least twenty-four months from the date of cessation. This is the minimum period for which insurance is required but it is recommended that this cover is maintained for not less than six years following cessation. Such cover may be achieved through the continuing insurance of the practice from which they have retired, or of its successor.
This is required to ensure that adequate cover is in place should claims be made at a later date for work undertaken whilst a member was in practice.