Revisions to CPA Ireland’s Bye Law 9, Professional Indemnity Insurance, become effective from 1
st January 2022 and apply to members who hold practising certificates. The changes can be summarised as follows;
- Members engaging in investment business must ensure that they have adequate PII which should be ring fenced in respect of the firm’s Investment Business activities. They must have in place a minimum cover of €1,300,380 in respect of each and every claim and €1,924,560 in aggregate per year for all claims. There are exemptions available from these levels for members who hold Category 1A authorisation or who have not conducted any investment business in the previous 12 months.
- The Bye Law has been updated to reflect the statutory PII requirements for members who accept liquidation appointments, pursuant to S.633 of the Companies Act 2014. Such members must hold professional indemnity insurance that meets the requirements of the Companies Act 2014 (Professional Indemnity Insurance) (Liquidators) Regulations 2016 or any enactment or re-enactment thereof. These regulations provide for a limit of liability for each and every claim of not less than €1,500,000 (exclusive of defence costs) and provide cover for defence costs.
- The self-insured excess has increased and shall not exceed €25,000 each and every claim, multiplied by the number of principals.
- Professional Indemnity insurance shall include retroactive cover for liabilities arising from work carried out previously. Where a retroactive date is included on a policy, it shall not predate a period of six years or if the firm has been in existence for less than six years, from the date of the inception of the firm, except for claims or potential claims known about at the time the insurance was first taken out.
For further details practitioners should refer
to Bye Law 9, PII on CPA Ireland’s website.