Professional indemnity insurance for accountants in Singapore

What an accounting business in Singapore must insure

ACRA announced on 6 October 2026 that amendments under the Corporate and Accounting Laws (Amendment) Act 2025 commence on 20 October 2026. One change extends the PI requirement to accounting firms operating as sole proprietorships or partnerships. Before that date, only public accounting corporations and accounting LLPs had to carry PI.

The minimum PI cover is the highest of three amounts:

1. S$1 million.
2. S$500,000 per public accountant in the firm.
3. 2.5 times the firm's gross income in the last financial year, up to S$50 million.

For an accounting LLP, ACRA's setup guide states the same formula per corporate practitioner. The firm must maintain the required cover at all times, not only at registration.

A firm with 3 public accountants and S$2 million of gross income works out as follows. The three amounts are S$1 million, S$1.5 million and S$5 million. The minimum is S$5 million.

Staff also count. Under the Work Injury Compensation Act, non-manual employees earning S$2,600 a month or less must be insured. Most accounting firms employ some staff below that level.

Covers most accounting businesses carry

PI is the core cover. The others protect the firm against claims PI excludes, such as employee dishonesty or a ransomware attack on its own systems.

Risks specific to accounting

Audit and assurance carry the largest claims. A lender, investor or acquirer relies on audited accounts, the company fails, and the auditor is sued for the shortfall. The claimant need not be the firm's client.

Other recurring claims:

• Missed deadlines. A late tax filing or objection leads to penalties or lost reliefs.
• Tax advice. A structure fails and the client pays tax, interest and penalties.
• Valuation and due diligence. A buyer overpays and sues on the report it relied on.
• Bookkeeping and payroll errors. Wrong CPF or GST figures lead to penalties.
• Fraud not detected. A client's employee steals for years and the client blames the auditor.

The exposure outlasts the engagement. The Limitation Act 1959 gives 6 years to sue in contract or tort from when the cause of action accrues. Latent damage extends it. A 2026 audit can produce a claim in 2032 or later.

PI for accountants is written on a claims-made basis. The policy in force when the claim is made responds. The retroactive date decides whether past work is included. The retroactive date guide explains how it works.

What moves the premium

Insurers price accountants' PI on five main factors.

1. Gross fee income. The base the rate is applied to.
2. Fee split by service. Audit of listed or regulated entities rates highest. Bookkeeping and payroll rate lowest.
3. Limit and excess. The ACRA formula sets the floor. Higher limits and lower excesses cost more.
4. Claims and circumstances. Past claims and notified circumstances weigh heavily. Findings from ACRA practice reviews may also be asked about.
5. Largest clients. The size and sector of the largest audit clients set the severity a single claim can reach.

Risk management also counts. Engagement letters with liability caps, partner review of audit files and documented quality control are read by underwriters. A firm whose income grows also raises its ACRA minimum, because the third limb rises with gross income.

What the broker needs from you

A broker needs the following to obtain terms:

1. Firm structure: sole proprietorship, partnership, LLP or corporation, with ACRA registration details.
2. Number of public accountants, partners and qualified staff.
3. Gross fee income for the last financial year and the current estimate.
4. Fee split: audit, tax, advisory, bookkeeping, corporate secretarial, valuation.
5. A list of the largest audit clients by fee and sector, including any listed or regulated entities.
6. Claims and circumstances for at least the last 5 years.
7. The current policy, retroactive date, limit and excess.
8. Sample engagement letters and any liability caps.
9. Partners joining or leaving, and any merged practices.

Insurance brokers in Singapore must be registered by MAS under the Insurance Act 1966. Registration can be checked in the MAS Financial Institutions Directory.

Frequently asked questions

What minimum PI cover does ACRA require?

The highest of S$1 million, S$500,000 per public accountant, or 2.5 times last year's gross income. The third amount is capped at S$50 million. The cover must be maintained at all times.

Does the requirement apply to bookkeeping and corporate secretarial firms?

The ACRA requirement attaches to public accounting entities registered to provide public accountancy services. A bookkeeping or corporate secretarial firm not registered as one falls outside it. Clients and contracts may still require PI.

Is cover on a claims-made basis?

Yes. The policy in force when the claim is first made responds, provided the work was done after the retroactive date. Changing insurer without keeping the retroactive date leaves past work uninsured.

What happens to cover when a partner retires?

The firm's ongoing policy usually covers past work of former partners while it stays in force. If the firm closes or merges, run-off cover is needed for past work. It should run for at least the 6-year limitation period, and longer for latent damage.

Sources

• ACRA: Commencement of key changes under the Corporate and Accounting Laws (Amendment) Act 2025 on 20 October 2026
• ACRA: Requirements for setting up an accounting LLP
• Limitation Act 1959
• MOM: Work injury compensation insurance
• MAS: Insurance broker registration and approval
• MAS: Financial Institutions Directory