Based on this bit of information, it's likely that you're 1) clipping your driver (the speaker), 2) overloading the front end (pre-amp) of your amp, or 3) clipping the power amp section. The manual for the Little Mark 250 doesn't say whether the "clip" light applies to the front end or to the power amp section. If it's like other amps, then it reads the peak voltage at the input at the front end. If that's the case and the LED is not illuminating, then the problem likely lies elsewhere.
Note that, if it's an overload situation at the front end, then adjusting the tone controls ("eq") will not help. If adjusting the controls does help, then the problem lies further down the chain from the controls. That would leave the power amp or the driver and, in both cases, adjusting the tone controls will help. It should be relatively easy to tell if it's the driver as they make characteristic "complaining" noises.
So, the cure may end up being exactly what Marton said, which is to "cut the lows a little."
I doubt that the problem lies with the pickup itself. If the pickup were the source of the problem, then, once again, adjusting the tone controls would not eliminate the distortion.
Famous last words: And with that- Im gone. You will probably read in the paper soon about a deranged kid who burns his bass in front of a luthier.