Professional Indemnity Insurance Flashcards
When calculating a member’s gross annual fee income for PII purposes, how is commission which has been received dealt with?
It is excluded from the calculation if it has been passed to the client in full
For the purposes of PII regulations, what does it mean if a member is acting in a personal capacity?
They are not asking as a member
If a member receives an honorarium of £500 for work done for a charitable organisation, what is the significance of this for the member’s PII?
No PII is needed in respect of an honorarium of less than £1000 per year
In relation to annual gross fee income, which one of the following best defines the minimum PII cover required?
£1,000,000 unless gross annual fee income is less than £400,000
When may an estimate of gross annual fee income be used by a practitioner calculating the minimum PII cover needed?
When the set of accounts are not for a full year and when the last year’s accounts have yet to be prepared
What is the time for which a member is required to maintain PII cover after ceasing public practice?
6 years
You are an ATT member working in sole practice, do you need PII and/or fidelity guarantee insurance?
You must take out PII but need not consider fidelity guarantee insurance
What are the rules in terms of PII for pro bono work?
The CIOT does not require PII cover
If you act for a charity, you should check whether the charity has PII cover and that you are included under that cover
What is the definition of ‘honorarium’?
A fee paid in respect of a formal honorary post for a ‘not for profit’ organisation
What type of insurance policy would offer protection for partners in the event of one partner disappearing with money held by the partnership?
Fidelity guarantee insurance
How is NIC dealt with in terms of PII?
It is specifically listed by the CIOT among taxation services requiring PII
After a member has ceased to work in public practice, for how long should PII cover be maintained?
6 years
What is gross fee income?
The aggregate of professional fees and all other income (including commission) earned in respect of and in the course of business during the accounting year immediately preceding the year in question but excluding any commission passed on to the client in full, and which is not retained to offset against fees
