Negligence / Professional Indemnity Insurance

Question 1

What is Professional Indemnity Insurance?

Answer 1

Protects businesses and professionals against financial losses due to claims of negligence or errors in their work.

Question 2

When can someone make a negligence claim?

Answer 2

When a duty of care is breached resulting in financial loss and damages

Question 3

When is Professional Indemnity Insurance required?

Answer 3

Always. It is mandatory for surveyors working in practice.

Question 4

What are the minimum PII requirements based on the firm’s turnover?

Answer 4

£100,000 or less - £250,000 PII

£100,001 to £200,000 - £500,000 PII

£200,001 or more - £1,000,000

Question 5

What level of would you require if you opened a new business?

Answer 5

Estimate the turnover and adjust accordingly

Question 6

What are the maximum PII requirements based on the firm’s turnover?

Answer 6

Up to £10 million = The greater of 2.5% of the sum insured or £10,000

Over £10 million = No set limit

Question 7

How often should you send proof of PII to the RICS?

Answer 7

Every year, alongside the firm’s annual return.

Question 8

How do PII claims work?

Answer 8

On a ‘claims made’ basis.

i.e policies cover claims that are made during the period of insurance regardless of when the negligent act occurred

Question 9

What is the RICS Regulation on PII?

Answer 9

RICS Professional Indemnity Insurance Requirements, July 2024

Question 10

What is Run-off cover?

Answer 10

Professional Indemnity Insurance that continues to protect them closing a practice, covering claims related to work done before closing