Insurance for probate work

Make sure you have the correct professional indemnity insurance in place

Many accountants now include probate activities in the professional service offerings to their clients. Although regarded as very complementary to tax planning, estate management and wealth management, probate is nevertheless seen by insurers as a diversification for an accountancy practice and must be disclosed to insurers so that appropriate professional indemnity cover can be put into place.

Professional indemnity insurers will require confirmation that probate practitioners have achieved (and maintain) competence and qualifications to undertake probate activities. ACCA provides guidance, support and relevant skills training, with regular online training and assessment available.

Lockton guides practitioners on how best to insure this new exposure. If all partners/directors are qualified to undertake probate activities and if the probate work represents less than 20% of the total income of the firm, the practice can usually extend its current professional indemnity policy to cover this diversification.

However, if the probate work represents a more significant percentage of the total income and/or is undertaken by only a limited number of qualified individuals in the firm, then businesses often form a separate limited company to carry out the probate work. In most cases we are able to cover this additional company under the existing professional indemnity policy.

Consideration must be given to the requisite limit of indemnity for the probate work. ACCA regulations require a minimum of £100,000 for any one claim limit of indemnity. Anyone engaged in probate activities must also assess the maximum exposure of any single client and/or estate so insuring that the limit of indemnity is adequate in the event of negligent advice or failure to act.  

Lockton is on hand to discuss the parameters of cover and the appropriateness of the limit of indemnity for your business – call Lockton Companies on 0117 906 5057, email or visit Lockton’s website for more information.